The loss payee on an insurance policy is any entity that has a financial interest in the item that is insured. The insured item can be anything such as a car or house or piece of art or jewelry that is insured. The loss payee is the entity that would get paid in the event of an insurance claim. It is usually a financial entity that has lent money using the item as collateral for the loan. This is done so that the financial entity is made whole on their loan in case of damage to the insured item. They would get paid directly from the insurance company as the loss payee.