Florida Insurance Licensing Practice Exam

How are lender's interests protected in personal property, such as automobiles?

1. Waiver clause

2. Mortgage clause

3. Loss payable clause

4. Assignment clause

The correct answer is: Loss payable clause

Loss payable clauses protect lender's interests in personal property, such as automobiles, by giving them priority in the event of a loss. Option A, waiver clause, is commonly used in insurance policies to waive certain conditions or rights. Option B, mortgage clause, is used in real estate transactions and would not be applicable in this case. Option D, assignment clause, allows the owner to transfer ownership rights but does not provide protection for the lender's interests.