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Additional Insured

You might have come across the term ‘additional insured’ and wonder how it applies to your insurance. It’s straightforward to comprehend. Keep reading for more information. 

Additional Insured

Who is an additional insured? 

A person you add to an insurance policy in addition to the primary policyholder is who you call ‘additional insured.’ Aside from people, it could also be an entity. The distinction between the named insured and the other person is crucial in this situation.

The designated insured is the person who bought the policy and has his name on it. Most home insurance policies automatically cover if the selected insured’s family, spouse, and children live in the house. An additional insured is someone who requires insurance coverage but does not fit into one of the preceding categories.

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A financial investment in the covered property is a requirement for this person. This usually implies some form of property ownership.

When Do You Need an Additional Insured? 

A policyholder may need to add this person to their policy in a few circumstances. You may need to choose the additional insured option when buying a house with your partner but aren’t legally married. 

Here, one of the partners would purchase the coverage as the policyholder and the other as an extra insured. 

Another scenario is if an elderly relative died and left their home to three grandchildren. Each of the three cousins needs to have their names as new insureds on the home’s insurance policy.

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These are two different home insurance possibilities. An extra may be necessary for various other, more challenging situations in commercial insurance. An example is a general contractor that subcontracts some of its tasks to a smaller company.

The general contractor would request that the subcontractor be a part of the extra to their commercial liability coverage. He may also receive reimbursement from the subcontractor’s insurance if the subcontractor causes damage to the project.

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