Loss payee
Lienholder listed on auto or property policies to receive claim payments affecting collateral.
Plain definition
A loss payee (lienholder) is named on auto or equipment policies so claim proceeds for damage or total loss flow to or through the lender leasing or financing the asset. The loss payee receives notice of cancellation and may receive payment before you on total losses.
Why it matters
If the insurer pays you alone on a totaled financed car, the lender still expects loan payoff from those funds.
Example
Your financed truck is stolen and not recovered. Comp pays ACV to you and the loss payee; the lender takes its balance first from the check.
Common misunderstanding
Loss payee is not an additional insured for liability—they have property interest only on the collateral listed.
Policy language always controls. This is educational content, not advice. See our disclaimer.