| Q&A of the Week |
Loss Payable Clause versus Lender's Loss Payable Clause
A New York subscriber recently asked the following question:
What are the practical differences between a loss payable clause and a lender's loss payable clause?
ANSWER: This answer is based on the loss payable and the lender's loss payable clauses of ISO's CP 12 18 10 12, Loss Payable Provisions endorsement.
The loss payable clause allows the named insured to specify a loss payee, who also has an insurable interest in the property and who will also receive a joint payment of claims with the named insured.
The lender's loss payable clause allows the named insured to specify a creditor as a loss payee. The creditor's interest in the property must be established by warehouse receipts, a contract for deed, bills of lading, financial statements, mortgages, deeds of trust, or security agreements. This clause bestows more rights on the loss payee than the loss payable clause: the right to receive loss payment if foreclosure has started on the covered property; the right to receive payment even if the claim is denied due the named insured's failure to comply with the policy terms (if the loss payee pays the premiums due, submits a signed proof of loss within sixty days, and notifies the insurer of any changes in ownership, occupancy, or other changes in the risk); and notification of policy cancellation or nonrenewal.
Essentially, the lender's loss payable clause has a narrower focus of creditors as loss payees, but with more rights under the policy than the loss payable clause allows. Read More |
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| What's New This Week in FC&S |
Fraudulent Impersonation
Identity theft is a widespread issue and does not seem to be slowing down. One of the issues with identity theft is the ability of the thief to impersonate an individual and then use that identity to steal from various organizations. Read More |
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| Litigation Watch |
Longshore and Harbor Workers Compensation Act Preemption Dispute
The employee filed an action against his former employer, the workers comp insurance carrier, and his insurance adjuster, alleging breach of contract, breach of fiduciary duty, fraud, and conspiracy to defraud. This case is Nadheer v. The Insurance Company of the State of Pennsylvania, 506 Fed.Appx. 297 (2013).
Nadheer was hired as an interpreter in Iraq in 2006. With respect to his employment, Nadheer was subject to the Defense Base Act (DBA) that extends the workers compensation scheme set out in the Longshore and Harbor Workers Compensation Act (L&HWCA) to cover employees injured or killed outside the continental United States by an American employer providing welfare or similar services for the benefit of the armed forces. Read More
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| Fraud of the Week |
Auto Repair Fraud—California
AMOUNT: Unknown
An individual has been charged with nine felony charges including auto insurance fraud, false billing, grand theft by fraudulent pretenses, and operating a business without a license. Read More
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| FC&S Ask the Experts |
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?
Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).
Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.
Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here. |
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