When you buy an insurance policy, you become the policyholder. This means you’re in charge of the coverage, so you can:
It also means you’re responsible for paying premiums and helping your insurance company investigate claims.
As the owner of a homeowners’ insurance policy, you’re probably also the primary person insured by the policy, so you’re also protected under all of the policy’s coverage parts. That includes its dwelling, personal property, and liability coverages.
Insurance professionals call the person who’s protected by a policy an insured. When you look at it that way, a policyholder is almost always an insured, especially if you’re talking about home insurance. In fact, you’re what insurance companies call a named insured, which means you’re specifically mentioned and covered by every aspect of your homeowners policy.
Another type of insured you might have on your homeowners policy is an additional insured. These are people, companies, and organizations that you’ve added to your coverage. One common example of an additional insured for homeowners is their mortgage lender. Additional insureds do not have any control over the policy.
You should also know that the named insured is not always the policyholder. For example, a person may take out life insurance on their spouse. The person taking out the policy is the policyholder and receives benefits, but the spouse is the insured.
Not everyone in your household needs to be a named insured to benefit from your coverage. For example, your home insurance policy might cover your:
Note we’ve included your spouse on the list of other insureds. Many insurers automatically make your spouse a named insured when they live in your home or are on the title, but some only consider them an insured. That can be a problem if you ever need your spouse to file a claim, so be sure to check your policy. If your spouse isn’t named on the declaration page or if the definition of named insured doesn’t include spouse, ask your insurer to make a change.
Not only are other insureds prohibited from filing claims or making coverage adjustments, they also aren’t necessarily covered by every aspect of your home insurance. Your children are a good example of this. They don’t own your home, so they don’t have an insurable interest in it. However, they can have personal property that’s protected under Coverage C. Perhaps more importantly, their actions are typically included in your liability coverage. Many policyholders have had to file insurance claims after their child breaks a neighbor’s window playing baseball.
People you employ in your home, such as housekeepers or nannies, may also be included in your personal property protection, but usually only that coverage. You can also cover your guests’ personal property, but you typically have to ask for that when you buy your policy.
Let’s say Jenna decides to buy a house. She talks to a mortgage company and finds out she needs insurance before escrow will close, so she buys a homeowners policy. This makes Jenna the policyholder and named insured. In order to protect its investment, her mortgage lender asks to be an additional insured.
Later, Jenna marries Joe, and he moves into her home. She contacts her insurance agent who tells her that as her spouse, Joe is automatically covered by her home insurance. However, she also asks to make Joe a named insured so he can file claims and make policy changes. Jenna then decides to increase her personal property coverage because she wants to make sure they have enough insurance to protect the items Joe brought into the marriage.