I'm renting a property owned by the State. The terms of the lease require renter's insurance in the amount of 300K each person and 2Mil each occurrence, combined single limit liability for bodily injury and property damage.
The State must be identified in the insurance agreement as an additional insured.

A clause in the lease reads "A loss payable endorsement shall be part of this policy indicating that all loss proceeds shall be payable to X as lessor" (X being the State bureau owning the site).

What's the intent here? That if there's a fire, for eg., the State wants to make sure it gets reimbursed for its loss? What about my personal belongings? Does the insurance co. make separate assessments, and reimburse me and the State separately? Then why does the clause say all loss proceeds?

And what if I get robbed of my personal belongings? Why would the State recover? I don't get it.


I'd appreciate any insight.