Are you wondering what does a loss payee on an insurance policy mean? We can help.
So you may be googling what does a loss payee on an insurance policy mean? This is why we wrote this post. A loss payee is a person or entity that is entitled to all or part of the insurance proceeds in connection with the covered property in which it has an interest. Often those asking to be named as a loss payee have leased some type of equipment to the insured—a photocopy machine, for example.
Several different loss payee clauses address different insurable interest situations. A loss payee is also common in a personal auto policy (PAP) in which the automobile is financed. The lending institution would be listed as the loss payee on the declarations page.
Who can add a loss payee to an insurance policy in Canada?
If your insurance policy was placed by a Canadian insurance broker, then you need to contact your broker to add an organization as loss payee or make any amendments to any loss payee already shown on your insurance policy. Making changes to a loss payee clause on an insurance policy should be done with the guidance of an insurance broker and the formal approval of all other loss payees as some organizations with loss payable interests won’t accept changes to any loss payee clauses after the policy has been issued.
Add a loss payee on an insurance policy in Canada and other reasons to update your insurance broker
A commonly question that ALIGNED Insurance brokers are often asked is “When do I need to update my insurance broker?”. Your insurance broker should be made aware of changes to your business ideally before they happen.
Specifically for loss payees, mortgagees & additional insured’s – The insurer(s) must be advised of any liens, leases, mortgages or encumbrance of other instances of a change in insurable interest in your property / automobiles / liability and/or requests to add third parties as additional insured’s to your insurance policies. It is your responsibility to pass along all such requests/requirements to your ALIGNED Insurance broker and they will ensure their interests are added to the applicable policy appropriately as well as provide the documentation needed to satisfy the third party request.ALIGNED Insurance: When do I need to update my insurance broker?