Definition of "Loss payable clause"

Cynthia Tant, PhD real estate agent

Written by

Cynthia Tant, PhDelite badge icon

Gulf Coast Home Experts, LLC

Coverage for a mortgagee where real or personal property, used as security for a loan, is damaged or destroyed. For example, a bank (mortgagee) lends money to an individual (mortgagor) who pledges certain valuables as security. The valuables are stolen. If the individual defaults on the loan, the bank would be indemnified under the policy for an amount up to the outstanding loan.

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