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Lender's interest (loss payee)
Boat insurance term, area: Contract
A confirmation to a bank or finance house financing the boat that it will receive the settlement if a claim is paid. Lenders regularly require it for a marine mortgage, a boat loan or a lease, and many ask for fresh proof each year. When the boat is sold or refinanced, the note on the policy has to be updated or removed.
What to check: Is the lender named on the schedule as loss payee, and what happens if the policy lapses? Does the insurer have to notify the lender before cover is cancelled or changed?
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A general explanation in our own words.
What applies to you is set only by the wording of your own policy.
