Does anyone know the difference between a loss/payee and a mortgagee when it comes to property insurance policies?

The difference can be found in state insurance laws. But here's the general difference. A loss payee clause just recognizes the fact the bank has an interest in the property. If there is a claim the check will be cut to both. If the claim is denied due to the damage being self-inflicted or such, the bank gets nothing.

The mortgagee clause creates a separate contract between the bank and the insurer. If there is a loss, the bank will get paid, even if the insured is deined payment for their own acts (e.g. arson). The mortgagee clause also gives the bank the right to advance notice before cancellation (the lead time dictated by the state). The bank also has the right to pay the premium to keep the policy in force. The mortgagee clause is more protective of the bank but is available only on real property. You never want to be just the Loss Payee when the collateral is real estate. If the collateral is equipment you'd like to be the mortgagee but it's not available so you become the loss payee.

Both of these endorsements are more prtoective of the bank than plain old "additional insured."

If a bank would rather be named as mortgagee, why do they often require both? What does a loss payee provide that a mortgagee not provide. And why would the insuring company sometimes not want to name the bank as loss payee, but only mortgagee? Thanks!