Insured

Insured means the person or entity that has a financial interest in the property and has the right to the proceeds during a claim.
Happy couple shaking hands with insurance agent

What Insured Means

The insured is the person, group of people, or entity who benefits from an insurance policy. Usually, the insured has a risk of being financially burdened if something damages the item covered by the policy. This risk, also called an insurable interest, is why the insured needs protection. The coverage is there to protect the insured from financial loss.

For example, let’s say that a homeowner has a fire that causes $50,000 in damages. Without home insurance, the homeowner would have to pay for all of the repairs out of pocket. But this homeowner bought coverage, so they’re an insured on a policy. This means their insurance carrier pays the claim on their behalf.

Who Qualifies as an Insured?

In almost all cases, the insured is the policyholder﹘essentially, the person who purchased and controls the policy﹘but there are instances where an insured is not the policyholder. Life insurance policies, for instance, are often bought by one individual but insure someone else, such as a spouse or a business partner.

The insureds on a homeowners policy also typically include family members living in your home. Most policies define the insured as the named insured, the named insured’s spouse, dependent children, and other dependents. For example, spouses are usually insureds on a homeowners policy, as are biological and adopted children.

You should note that a long-term significant other might not be automatically considered an insured on your home insurance. Depending on your state’s laws, a live-in partner may not fit the definition of a spouse. Similarly, roommates are usually only considered insureds if they are related to you by blood.

Insured Example

Let’s say you have a child who lives in your home. The child hits a baseball and accidentally breaks your neighbor’s window. As an insured, your child’s liability is most likely covered by your home insurance, so your insurance carrier pays for the broken window.

But what happens when that child grows up and goes to college? In many situations, homeowners insurance still covers:

Policies typically continue to cover college students who are under the age of 24 and who live on campus. But every policy is different, so you should talk to your agent to make sure your college-age student is covered.

Named Insured vs. Additional Insured

As we’ve discussed, insurance companies typically consider family members living in your house to be insureds. However, only some of those people can be named insureds, or the people specifically named in your policy as having coverage. The primary example of a named insured is the homeowner (i.e., the person whose name is on the deed). This person’s name also appears on the policy’s declaration page.

Additional insured are other people or entities who aren’t assumed to be covered by your homeowners’ insurance but who have a financial interest in your home. An additional insured might be a live-in partner whose property and liability need protecting or a sibling who helped you buy your home but lives elsewhere. As the named insured, you can add them to your policy.

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