Auto Loss Payable Clause
Loss or damage, if any, to the automobile insured under this policy shall be payable as provided in the policy and this insurance as to the interest of the named mortgagee, (hereinafter called the lienholder) shall not be invalidated by any act or neglect of the mortgagor or owner of the within described automobile nor by any change in the title to ownership of the property; provided, however, that the wrongful conversion, embezzlement or secretion by purchaser, mortgagor or lessee in possession under a mortgage, conditional sale or lease agreement of the property insured is not covered under this policy, and provided also, that in case the mortgagor or owner shall neglect to pay any premium due under this the lienholder shall on demand pay the same.
Provided also, that the lienholder shall notify this company of any change of ownership or increase of hazard which shall come to the knowledge of said lienholder and unless permitted by this policy, it shall be noted thereon and the lienholder shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void.
This company reserves the right to cancel this policy at any time as provided by its terms, but in such a case this policy shall continue in force for the benefit only of the lienholder for ten days after mailing notice to the lienholder of such cancellation and shall then cease, and this company shall have the right, on like notice, to cancel this agreement.
In case of any other insurance upon the within described property this company shall not be liable under this policy for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of valid and collectible insurance on said property, issued to or held by any party or parties having an insurable interest therein whether as owner, lienholder or otherwise.
Whenever this company shall pay the lienholder any sum for loss or damage under this policy and shall claim that, as to the mortgagor or owner, no liability existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all rights of the party to whom such payment shall be made, under all securities held as collateral to the debt, or may at it option, pay the lienholder the whole principal due to become due on the mortgage with interest, and shall thereupon receive a full assignment and transfer the mortgage and of all such other securities; but not subrogation shall impair the right of the lienholder to recover the full amount of its claim.
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