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Named Insured, Additional Insured, Driver? What?

Ah yes. The terms of insurance. These few terms can be so confusing to consumers. Maybe your bank, lien holder or contractor tells you they need to be listed as additional interest or an additional insured. Perhaps you were told that a household member needs to be listed as a named insured vs. a driver. You call us to request the change but if you are like most of us - you're just following direction without really knowing how it effects you and your policy. Let me help. I'm going to break that down for us all.

Let's start with a Named Insured and listed driver. A Named Insured is the person who owns the insurance policy. The Named Insured is who is going to receive a payout in the event of a claim (might be some exceptions to this). You, for example. Or your spouse, or both. You are listed as a Named Insured on your policy vs being listed as just a driver. Now, your kids, maybe a live in relative, a parent - they could be listed as drivers but might not be the named insured. Named Insured are also listed as drivers. Every licensed member in the house hold (that does not carry their own insurance) would be listed as a driver on your policy. But only those who own/purchase the policy are the Named Insured. They are also the only ones that can make changes to their policy. If you son calls up to say he bought a 99 Ford F150 and to put full coverage on it, even though there might be some "damage", we will call the named insured prior to making any change.

Now, let's dive into the additional interest vs additional insured. This one is really confusing as they almost sound the same. But they mean completely 2 separate things. An Additional Interest is a third party who benefits from knowing an insurance policy is in place but doesn't need the coverage. Someone listed as an additional interest is notified if something changes on your policy such as cancellations, lapses or renewals. Car insurance for example - if you finance your vehicle, your lien holder wants to be listed as an additional interest - they don't need to coverage for them, but this tells them that you have coverage in place and in the event of a loss/payout, they would still receive payment as they have a financial interest in that vehicle.

If you have a business, especially contractors, you are probably very familiar with the term additional insured. An Additional Insured, is a third party that is added to an insurance policy and are afforded protection under the policy and given the right to make a claim on the policy. Say you are a sub-contractor and you bid and won a job. It's highly likely your contractor, architect or the company having the work done are going to require you to list them as an additional insured on your policy. Depending on how your policy is written, there could be an additional cost to add them. In the event of a loss, they could receive payment. They want the coverage in place to cover the work you do for them. If there is a claim, let's say on the roof you put in because of workmanship, they could receive that payout.

I know, I know. That's as clear as the Captain Morgan you're now drinking (21 and over of course!) because I made your head hurt. Here's the deal, Folks. CALL YOUR AGENT! Don't have us make a change to your policy if you aren't sure what it means for you. As your agent, we want to make sure you understand EXACTLY what coverage you have in place, who is listed, why and who might receive a payout in the event of a loss. That could be anyone from your mortgagee on your home, the lien holder on your car or the contractor that hired you to do a job. Make sure you know who you are adding and why you need to add them. After all, we are the insurance guru's. That's why we are here for you. To Protect You and Yours.

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