Also known as: loss payee meaning · what is a loss payee
A third party named on a property insurance policy who receives claim payments directly when insured property is damaged or destroyed.
A loss payee is a lender, lessor, or financing company that has a financial interest in insured property — typically because they provided a loan or lease to purchase it. When covered property is damaged or destroyed, the insurer pays the loss payee directly (up to their interest) before any remaining proceeds go to the policyholder. Loss payee designations are most common on commercial property, equipment, and vehicle policies.
"[Lender name] is hereby named as Loss Payee as their interest may appear."
A loss payee is a party — usually a lender or equipment lessor — that is listed on your property insurance policy to receive claim proceeds directly. When you finance or lease equipment, the lender requires loss payee status so they are compensated if the property is destroyed before the loan is paid off.
A loss payee only has rights to claim proceeds on property they have a financial interest in — they cannot file a liability claim. An additional insured has broader rights: they are covered as an insured under your liability policy and can be defended if they are sued because of your operations. Many vendor contracts require both designations on different policies.
Contact your broker or carrier and provide the loss payee's full legal name and address. Your insurer will issue a loss payee endorsement — this is usually free and processed within 24 hours. You can then provide the updated Certificate of Insurance (COI) showing the loss payee designation to your lender.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.