Which clause in a property insurance policy ensures that a loss payee is included in claim payments?

The loss payable clause is a critical element in a property insurance policy that specifically addresses the payment process in the event of a covered loss. This clause ensures that the interests of a designated loss payee, such as a lender or lienholder, are recognized and protected during the claims process. When a loss occurs, the insurer is obligated to pay the loss payee for the portion of the insurance coverage assigned to them.

In many situations, loss payees are involved in financing the property, so their financial interest must be safeguarded. The loss payable clause stipulates that the insurance company will make payment directly to the loss payee in accordance with their interest in the property, ensuring that they receive compensation for any losses that affect the value of the secured asset.

The other options do not serve the same function. The inception clause pertains to the start date of coverage, the endorsement clause typically involves modifications or additions to the existing policy, and the coverage declaration clause outlines the specifics of what is covered under the policy itself. None of these directly reference the inclusion of loss payees in claim payments as the loss payable clause does.