Loss payee vs additional insured
A loss payee is paid for loss to the vehicle itself; an additional insured is covered when it is sued over your vehicle. A loss-payee or lienholder provision addresses a financial interest in the vehicle and claim proceeds. Additional-insured status addresses specified liability exposure under an endorsement. A lender financing a vehicle asks for the first: Ally's form asks for fire, theft and collision coverage with a loss payable endorsement. A trailer lessor such as McKinney asks for both. A certificate holder receives evidence and does not gain coverage merely because its name appears on a COI.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
What is a loss payee on a commercial auto policy?
A company the insurer pays, along with you, for loss to a covered vehicle. On a business auto policy the ISO endorsement is CA 99 44, the Loss Payable Clause: "We will pay, as interest may appear, you and the loss payee named in the policy for "loss" to a covered "auto"." The business auto form defines loss as "direct and accidental loss or damage" and pays it "for "loss" to a covered "auto" or its equipment" under comprehensive, specified causes of loss or collision coverage.
The loss payee's interest is covered "unless the "loss" results from conversion, secretion or embezzlement on your part," and if the insurer cancels, it "will mail you and the loss payee the same advance notice."
A loss payee example from Redoubt's own placements: a dealer's paperwork on a financed Peterbilt said the policy "has to go loss payee listed as the following PACCAR financial." Ally's form follows its name with "and in each case its successors and assigns." Copy the lender's wording exactly.
What does an additional insured get on a commercial auto policy?
Liability coverage, and only for liability tied to your covered autos. The business auto form pays "all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage"" from an accident with a covered auto, and its list of insureds ends with "Anyone liable for the conduct of an "insured" described above but only to the extent of that liability." ISO's CA 20 48 names a third party an insured "but only to the extent that person or organization qualifies as an "insured" under the Who Is An Insured provision."
The two roles sit in different parts of the policy. Additional insured status changes who is an insured under Covered Autos Liability Coverage, where the insurer has "the right and duty to defend any "insured"" against a suit. The loss payable clause changes who is paid for loss to a covered auto. Ally's form asks a borrower for fire, theft and collision coverage with a loss payable endorsement and asks nothing about liability. McKinney's trailer lease terms say McKinney "must be named as additional insured" on your auto liability.
When do you need a loss payee on your insurance?
When a loan, lease or rental agreement on the vehicle says so. Ally's form puts it in the borrower's words: "my installment contract requires that the vehicle be continuously covered with insurance against the risks of fire, theft and collision." McKinney wants the certificate "prior to completing the contract and removing the equipment from our facility."
In one Redoubt placement, on a financed Peterbilt, the list we were given was "proof of physical damage on the insurance certificate," a "max $2,500 deductible" and an "insured amount of $74,002.94 or ACV." In another, a lender told us it could not proceed without the certificate: "we can't fund it or anything until we get that."
Is a lienholder the same as a loss payee?
Not by definition. Utah's Motor Vehicle Act defines a lienholder as "a person with a security interest in particular property." A loss payee is the party CA 99 44 pays: "the loss payee named in the policy." A lender with a lien gets loss payee rights only when the carrier names it in the policy, which is why Ally's form asks the borrower to request "a loss payable endorsement in favor of the holder of my contract." In one Redoubt placement, the underwriters needed "the name and address of the company financing the dodge to add them as loss payee on the policy."
What is a lender's loss payable endorsement?
The creditor's version of the clause. ISO writes it as clause C.2 of CP 12 18, a commercial property endorsement, for a loss payee that is "a creditor, including a mortgageholder or trustee" with a security agreement or similar instrument. If the insurer denies your claim "because of your acts," the lender can still be paid on the conditions in the table.
On a business auto policy the ISO loss payable endorsement is CA 99 44, whose terms are in the first two rows of the table. When truck loan papers say "lender's loss payable endorsement," ask the carrier which form it will attach and compare it with the lender's wording. CA 99 44 is one page with four lettered paragraphs. "Loss payee" names the company; "loss payable" names the clause.
| Clause | Who it pays | Protection against your own acts | Notice if the insurer cancels |
|---|---|---|---|
| CA 99 44 (business auto) | You and the loss payee, as interest may appear | Lost if the loss is your conversion, secretion or embezzlement | Same advance notice as you |
| CA 20 01 B (auto, lessor) | You and the lessor, as interest may appear | Lost if the loss is from your fraudulent acts or omissions | Per the cancellation condition, and if you cancel |
| CP 12 18 C.2 (property, lender) | Each creditor in order of precedence | Kept on a claim denied for your acts, if it pays premium due, files proof of loss in 60 days and reported known changes | 10 days for nonpayment, 30 otherwise, 10 before nonrenewal |
Why does a lessor ask to be additional insured and loss payee?
Because its lease terms ask for both, and one ISO endorsement grants both. CA 20 01, Lessor – Additional Insured And Loss Payee, adds the lessor as an insured, but "only for "bodily injury" or "property damage" resulting from the acts or omissions by" you, your employees or agents, or your permissive drivers, and it pays "you and the lessor named in this endorsement for "loss" to a "leased auto"."
It also says "The lessor is not liable for payment of your premiums," and applies to a lease "that requires you to provide direct primary insurance for the lessor." McKinney's trailer requirements show the split: McKinney as additional insured on general and auto liability, and the certificate showing trailer physical damage with the "loss payee, and deductible ($2,500 maximum)."
Is the certificate holder the same as the loss payee?
No. Utah's statute says a certificate "is not an insurance policy" and "may not confer to a certificate holder a right that is not provided by an insurance policy to which the certificate of insurance refers," and it bars anyone from knowingly issuing one that "purports to affirmatively or negatively alter, amend, or extend the coverage." A loss payee's rights come from the policy's loss payable clause, which pays "the loss payee named in the policy."
One company can be both. On the Peterbilt above, the dealer's contact said: "As far as a loss payee and certificate holder, that'll need to be listed as the PACCAR Financial Corp." The loss payee entry has to be on the policy; naming the lender as certificate holder does not put it there.
How do I add a loss payee or lienholder to my insurance?
Start from the written requirement. Use the agreement itself. A request that says only 'add us to the insurance' is not specific enough to choose a role, endorsement, or certificate wording. Utah State University's risk office says a loss payee request "will be clearly stated in the insurance section of the contract/agreement."
Send your agency the lender's exact name and address and the VIN; in one Redoubt placement the underwriters would not add the loss payee without "the name and address of the company financing the dodge." The change is made on the policy by endorsement: in another placement the market wrote that it was adding the party as a loss payee and was "just waiting on the endorsement for the policy." Ask early. One market told Redoubt, "We will not be able to add West Lake Financial as the loss payee."
What to send to add a loss payee or additional insured
- 1.The insurance paragraph of the loan, lease or rental agreement
- 2.The lender's or lessor's exact name and address, with any successors and assigns wording
- 3.The role each party wants: loss payee, additional insured or certificate holder
- 4.Year, make, model and VIN of each vehicle
- 5.The insured value the lender states: a dollar amount or actual cash value
- 6.The highest deductible allowed
- 7.Loan or account number
- 8.The date evidence is due and where it goes
Can a freight broker be a loss payee on my motor truck cargo policy?
Only if the insurer adds it to the policy; a certificate cannot. In one Redoubt placement, the market's answer, as we relayed it to the client, was that the broker could not be an additional insured because it was not hauling the goods; the market then wrote that it was adding the broker as a loss payee and was waiting on the endorsement. Send the broker's written requirement to your agency before you accept the load.
What does first loss payee mean?
CA 99 44 does not use the phrase: it pays you and the loss payee "as interest may appear" and does not rank payees. ISO's property lender's clause does rank them, paying each loss payee "in their order of precedence." If loan papers say first loss payee, ask the carrier how its endorsement will show the lender's place.
What is the difference between the insured and the certificate holder?
Under the business auto form, the insureds are you for any covered auto, anyone using a covered auto with your permission (with listed exceptions), and anyone liable for their conduct; an endorsement such as CA 20 48 can add more. A certificate holder is not on that list, and Utah law says a certificate cannot give it a right the policy does not provide.
Where these answers come from
Each entry carries the exact words of the source so you can check it yourself. Forms, rules and carrier pages change; read the current version before acting.
- 1. ISO CA 99 44 10 13, Loss Payable Clause, paragraphs A and B (IIAT InfoCentral copy)
“We will pay, as interest may appear, you and the loss payee named in the policy for "loss" to a covered "auto". B. The insurance covers the interest of the loss payee unless the "loss" results from conversion, secretion or embezzlement on your part.”
iiat.org, accessed October 3, 2026. The form modifies the Auto Dealers, Business Auto and Motor Carrier coverage forms. ISO form text, the edition hosted at this URL. A later ISO edition or the carrier's own form may read differently; the endorsement your carrier issues is the one that applies. - 2. ISO CA 99 44 10 13, Loss Payable Clause, paragraphs C and D
“Cancellation ends this agreement as to the loss payee's interest. If we cancel the policy, we will mail you and the loss payee the same advance notice. D. If we make any payments to the loss payee, we will obtain his or her rights against any other party.”
iiat.org, accessed October 3, 2026. Paragraph C opens: "We may cancel the policy as allowed by the Cancellation Common Policy Condition." - 3. ISO CA 00 01 11 20, Business Auto Coverage Form, Section III Physical Damage Coverage, A.1 (FC&S copy on Touchpoint Markets)
“We will pay for "loss" to a covered "auto" or its equipment under:”
assets.touchpointmarkets.com, accessed October 3, 2026. The list that follows is a. Comprehensive Coverage, b. Specified Causes Of Loss Coverage and c. Collision Coverage. - 4. ISO CA 00 01 11 20, Business Auto Coverage Form, Section V Definitions, "Loss"
“"Loss" means direct and accidental loss or damage.”
assets.touchpointmarkets.com, accessed October 3, 2026 - 5. ISO CA 00 01 11 20, Business Auto Coverage Form, Section II Covered Autos Liability Coverage, A. Coverage
“We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".”
assets.touchpointmarkets.com, accessed October 3, 2026 - 6. ISO CA 00 01 11 20, Section II, A. Coverage, duty to defend
“We have the right and duty to defend any "insured" against a "suit" asking for such damages or a "covered pollution cost or expense".”
assets.touchpointmarkets.com, accessed October 3, 2026 - 7. ISO CA 00 01 11 20, Section II, A.1 Who Is An Insured, paragraph c
“Anyone liable for the conduct of an "insured" described above but only to the extent of that liability.”
assets.touchpointmarkets.com, accessed October 3, 2026. Paragraphs a and b name you, for any covered auto, and anyone else using a covered auto with your permission, with listed exceptions. - 8. ISO CA 20 48 10 13, Designated Insured For Covered Autos Liability Coverage, operative paragraph
“Each person or organization shown in the Schedule is an "insured" for Covered Autos Liability Coverage, but only to the extent that person or organization qualifies as an "insured" under the Who Is An Insured provision”
iiat.org, accessed October 3, 2026 - 9. ISO CA 20 01 11 20, Lessor – Additional Insured And Loss Payee, paragraph A.2 (FC&S copy on Touchpoint Markets)
“For a "leased auto" designated or described in the Schedule, the Who Is An Insured provision under Covered Autos Liability Coverage is changed to include as an "insured" the lessor named in the Schedule. However, the lessor is an "insured" only for "bodily injury" or "property damage" resulting from the acts or omissions by:”
assets.touchpointmarkets.com, accessed October 3, 2026. The list that follows: you; any of your employees or agents; any person, except the lessor or any employee or agent of the lessor, operating a leased auto with the permission of any of the above. ISO form text, the edition hosted at this URL. A later ISO edition or the carrier's own form may read differently; the endorsement your carrier issues is the one that applies. - 10. ISO CA 20 01 11 20, paragraph B.1, Loss Payable Clause
“We will pay, as interest may appear, you and the lessor named in this endorsement for "loss" to a "leased auto".”
assets.touchpointmarkets.com, accessed October 3, 2026 - 11. ISO CA 20 01 11 20, paragraph B.2
“The insurance covers the interest of the lessor unless the "loss" results from fraudulent acts or omissions on your part.”
assets.touchpointmarkets.com, accessed October 3, 2026 - 12. ISO CA 20 01 11 20, paragraph C, Cancellation
“If we cancel the Policy, we will mail notice to the lessor in accordance with the Cancellation Common Policy Condition. 2. If you cancel the Policy, we will mail notice to the lessor.”
assets.touchpointmarkets.com, accessed October 3, 2026. Paragraph C.3: "Cancellation ends this agreement." - 14. ISO CP 12 18 10 12, Loss Payable Provisions, clause C.2.a Lender's Loss Payable Clause (IIAT InfoCentral copy)
“The Loss Payee shown in the Schedule or in the Declarations is a creditor, including a mortgageholder or trustee, whose interest in Covered Property is established by such written instruments as:”
iiat.org, accessed October 3, 2026. A commercial property endorsement. The listed instruments are warehouse receipts, a contract for deed, bills of lading, financing statements, and mortgages, deeds of trust, or security agreements. - 15. ISO CP 12 18 10 12, clause C.2.b(1)
“We will pay for covered loss or damage to each Loss Payee in their order of precedence, as interests may appear.”
iiat.org, accessed October 3, 2026 - 16. ISO CP 12 18 10 12, clause C.2.b(3), the lender's rights when your claim is denied
“If we deny your claim because of your acts or because you have failed to comply with the terms of the Coverage Part, the Loss Payee will still have the right to receive loss payment if the Loss Payee:”
iiat.org, accessed October 3, 2026. Conditions that follow: (a) pays any premium due at the insurer's request if you have failed to; (b) submits a signed, sworn proof of loss within 60 days after notice of your failure to do so; (c) has notified the insurer of any change in ownership, occupancy or substantial change in risk known to it. - 17. ISO CP 12 18 10 12, clause C.2.c, cancellation notice to the lender
“If we cancel this policy, we will give written notice to the Loss Payee at least: (1) 10 days before the effective date of cancellation if we cancel for your nonpayment of premium; or (2) 30 days before the effective date of cancellation if we cancel for any other reason.”
iiat.org, accessed October 3, 2026. Clause C.2.d adds written notice at least 10 days before the expiration date if the insurer elects not to renew. - 18. Utah Code 31A-22-1704, scope of certificate of insurance, subsections (1) and (2)
“A certificate of insurance is not an insurance policy and does not affirmatively or negatively amend, extend, or alter the coverage afforded by an insurance policy to which a certificate of insurance refers. (2) A certificate of insurance may not confer to a certificate holder a right that is not provided by an insurance policy to which the certificate of insurance refers.”
le.utah.gov, accessed October 3, 2026. Retrieved with curl -k (the site's TLS chain fails some clients). Enacted by Chapter 253, 2011 General Session. - 19. Utah Code 31A-22-1705(2), false or misleading certificate practices
“A person may not knowingly prepare or issue a certificate of insurance that: (a) contains false or misleading information; or (b) purports to affirmatively or negatively alter, amend, or extend the coverage provided by an insurance policy to which the certificate of insurance refers.”
le.utah.gov, accessed October 3, 2026. Retrieved with curl -k. - 20. Utah Code 41-1a-102(37), Motor Vehicle Act definitions (version effective 2026-10-01)
“"Lienholder" means a person with a security interest in particular property.”
le.utah.gov, accessed October 3, 2026. Retrieved with curl -k. Subsection (54)(a) defines the owner as a person, other than a lienholder, holding title to a vehicle. - 21. Ally Financial, Form 288G (7/2013), Confirmation of Accidental Physical Damage Insurance
“my installment contract requires that the vehicle be continuously covered with insurance against the risks of fire, theft and collision. Accordingly, I have arranged for the required insurance through the insurance company shown below and have requested that the policy contain a loss payable endorsement in favor of the holder of my contract”
ally.com, accessed October 3, 2026. A lender's own dealer form, still hosted on ally.com on the pull date. Its vehicle-use boxes are "Private Passenger" and "Commercial Auto and Trailer"; it marks a limited collision form "NOT ACCEPTABLE"; its dealer confirmation block records whether the loss payee was confirmed with the agency or the insurance carrier. It asks nothing about liability insurance. - 22. Ally Financial, Form 288G (7/2013), loss payee block
“and in each case its successors and assigns.”
ally.com, accessed October 3, 2026. The block lists "Ally Financial" and "Ally Bank" as the loss payee choices, followed by this phrase. - 23. McKinney Trailer Rentals, Insurance Requirements 2026 (PDF)
“Any lease or rental agreement with Mckinney has the following minimum insurance requirements. An insurance certificate must be provided and evidenced to us prior to completing the contract and removing the equipment from our facility.”
mckinneytrailers.com, accessed October 3, 2026. One trailer lessor's own requirements, not an industry standard. - 24. McKinney Trailer Rentals, Insurance Requirements 2026, Commercial Primary Auto Liability Requirements
“Mckinney Vehicle Services, Inc and J.T. Mckinney Co, Inc must be named as additional insured”
mckinneytrailers.com, accessed October 3, 2026. The sentence appears under both auto liability options ($1,000,000 combined single limit), each with "Waiver of Subrogation Required". The general liability section says the same entities "must be named additional insured". - 25. McKinney Trailer Rentals, Insurance Requirements 2026, Insurance Requirements For Trailer Physical Damage, Option 2
“Option 2: Schedule Trailers on Policy. The following verbiage must appear on the certificate of insurance when issued: name of current insurance carrier, policy number, effective date, expiration date, all vin numbers, all trailer values, loss payee, and deductible ($2,500 maximum)”
mckinneytrailers.com, accessed October 3, 2026. Option 1 is hired auto physical damage with the policy limit or ACV listed, the loss payee, and the same deductible cap. - 26. Utah State University Risk Management, Certificates of Insurance
“Loss Payee - If the certificate holder is asking to be named as loss payee, it will be clearly stated in the insurance section of the contract/agreement.”
usu.edu, accessed October 3, 2026. The same page says of additional insured requests: "this will be clearly stated in the insurance section of the contract." USU is the insured here, arranging certificates for third parties. - 27. Redoubt call with an owner-operator buying a financed Peterbilt, 2026-07-09
“And it just says it has to go loss payee listed as the following PACCAR financial.”
Redoubt agency records, accessed July 9, 2026 - 28. Redoubt call with the dealer's contact on the same Peterbilt, 2026-07-10
“As far as a loss payee and certificate holder, that'll need to be listed as the PACCAR Financial Corp.”
Redoubt agency records, accessed July 10, 2026 - 29. Redoubt text to the same owner-operator listing what the dealer and lender asked for, 2026-07-09
“I wrote down what PACCAR/the dealer is asking for: • proof of physical damage on the insurance certificate • max $2,500 deductible • insured amount of $74,002.94 or ACV”
Redoubt agency records, accessed July 9, 2026 - 30. Redoubt call with a vehicle lender about insurance paperwork and funding, 2026-09-30
“So well, if we're financing it and we need, you know, a COI to be able to proceed, we can't fund it or anything until we get that.”
Redoubt agency records, accessed September 30, 2026 - 31. Redoubt text to an insured adding a financed replacement vehicle, 2026-07-23
“I just confirmed with my underwriters, they need the name and address of the company financing the dodge to add them as loss payee on the policy.”
Redoubt agency records, accessed July 23, 2026 - 32. A market's email to Redoubt on a financed vehicle, 2026-08-04
“We will not be able to add West Lake Financial as the loss payee. Do you want to proceed without West Lake Financial as an Additional Insured?”
Redoubt agency records, accessed August 4, 2026. One market's decision on one placement. - 33. Redoubt text to a courier client whose broker asked to be added, 2026-09-22
“since Bronpe LLC is not hauling the goods for you, they cannot be added as an Additional Insured.”
Redoubt agency records, accessed September 22, 2026 - 34. The market's email to Redoubt on the same request, 2026-09-24
“Hello, I should have confirmed yes we are adding them as a loss payee to the policy. I am just waiting on the endorsement for the policy.”
Redoubt agency records, accessed September 24, 2026
A lender or dealer will not release the truck until the insurance names it
Financed semis and vans: the loss payee, physical damage, temporary cover and the certificate the finance desk needs.
Elsewhere on the site
Lender or lessor asking to be added?
Text Redoubt the insurance section of the agreement, the exact name and address it gives, and the VIN. We will tell you which role each party is asking for, what the carrier has to endorse, and what to send back.
This is general insurance information, not legal advice or a coverage determination. The policy forms, the endorsements the carrier issues, and the requirement in writing from whoever is asking control.