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 the homeowner is the insured on a policy, and the insurance carrier pays covered losses on his or her 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. Our Florida homeowners policies define insureds as any who lives in the house and is related to the named insured as well as anyone under the age of 21 who is in the named insured’s care. Outside of Florida, our House & Property insurance policies define the insured as:
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The policyholder.
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The policyholder’s relatives who live in the home.
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People under the age of 21 who live in the home and are under the policyholder’s care or that of the policyholder’s relatives who also live in the home.
House & Property policies also call the policyholder’s relatives “insureds” if they are younger than 25, financially dependent on the policyholder, enrolled in school full time, and were residents of the policyholder’s home immediately before moving out to attend school.
An insured may even be the policyholder’s legal representative if the policyholder dies while covered by the policy.
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 may 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.
Does it matter whose name goes on homeowners insurance?
When you buy homeowners insurance, any person or entity with a financial stake in the property being covered should be named on the policy. That way, if something happens and the property is damaged or destroyed, anyone with an insurable interest can receive compensation for their loss from the insurer.
Additionally, if another entity has a financial interest on your property, they should also be named on the policy. For example, if you have a mortgage, your mortgage lender will probably require you to list them as an additional insured. That way the lender knows that if your home is damaged or destroyed, they can recoup their losses, often equal to the outstanding balance on your mortgage at the time of the loss.
Named insured or 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.
