Question

Oap 1 section 7 typically covers loss or damage related to auto insurance, and the lienholder usually insists on being named as a loss payee to protect their financial interest in the vehicle. True or False.

Answer 1

The assertion that lienholders insist on being named as a loss payee in auto insurance to protect their interest in the vehicle, which serves as collateral, is true.

Step-by-step explanation:

The statement is true that OAP 1 Section 7 typically covers loss or damage related to auto insurance, and that lienholders usually insist on being named as a loss payee. The reason behind this is to protect their financial interest in the vehicle which serves as collateral. In the context of auto insurance, collateral is the vehicle in question—it's a valuable asset that the lender has the right to seize and sell if the loan is not repaid. Naming the lender as a loss payee ensures that they will receive the insurance payout directly in the case of damage or loss to the vehicle, thus securing their investment.