Noun
named in·sured | ˈnāmd in-ˈshu̇rd
Definition: The person or organization designated by name on a policy of insurance and covered outright by the policy.
Only the named insured can make changes to this policy.
An insured is any person who’s covered by an insurance policy. A named insured is the insured who the policy mentions explicitly by name. Think of the named insured as the owner of an insurance policy: they pay for it, they choose which coverages they want in it, and they’re allowed to change or cancel it.
However, most insurance policies also extend coverage to certain people whose names don’t appear on the policy. Instead of naming them, the policy describes them: the named insured’s spouse, the named insured’s dependants, and so forth.
Those unnamed people are just called “insureds.” They’ve got some coverage under the policy, but they’re not allowed to make changes to it. They also might not have coverage under every part of the policy. Generally, only the named insured gets the benefits of the whole policy. Other insureds may have coverage under one section but not another:
Example
Rashida is a homeowner whose daughter lives away from home at university. Rashida is the named insured on her home insurance policy, and so gets the benefit of all the policy’s coverages: building, liability, personal property, and additional living expenses. Additional living expenses coverage helps cover extra costs if Rashida must temporarily move out of her home because of a fire, flood, or other insured loss.
The policy extends most of these coverages to “dependents of the Named Insured while attending college or university.” As such a dependant, Rashida’s daughter has coverage for her personal possessions while she’s living at university, even though her name isn’t on the policy.
However, the policy doesn’t include additional living expenses coverage for dependents living away from home. If Rashida’s university dormitory were to burn down in a fire, the insurance policy wouldn’t cover the extra expenses involved in finding her a new home.
In some cases, there may be more than one named insured on a policy. For example, a couple may wish to have both their names on their home insurance policy to they can each make changes to it.
There’s another wrinkle in the different types of insureds: the additional insured. We’ve already gone over the named insured and the general, un-named insureds that an insurance policy covers.
The additional insured is a third type.
Confusingly, insurance policies will specifically name additional insureds, too. However, an additional insured doesn’t usually receive the policy’s full coverage, nor can they change or cancel the policy.
Additional insureds are usually part-owners of an insured property. For example, a mortgage lender usually requires the homeowner add them as an additional insured to the home insurance policy. The mortgage lender has invested in the home, after all. They can’t make any changes to the policy, but they’ll get their share of the settlement if the house were destroyed entirely. They’ll also receive a notification if the named insured or the insurance company cancels the policy.
We’ve got a full page on additional insureds if you want to know more.
Named insureds are specifically named on an insurance policy, and are the only insureds allowed to change or cancel the policy.
Named insureds are usually the only insureds who are covered by every section of the insurance policy.
Most insurance policies extend coverage to certain types of people who are not explicitly named on the policy wordings; these people are known simply as “insureds.”
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About the expert: Daniel Mirkovic
A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.
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