Additional Interest vs. Additional Insured

When reviewing your auto, home, condo, or renters insurance policy, you may come across two similar but distinct terms: “additional insured” and “additional interest.” This guide from Bankrate breaks down the differences between an additional interest and an additional insured, including how each designation affects your coverage.

What is additional interest vs. additional insured?

Both terms refer to a person, business or other entity added to an insurance policy — whether it’s for auto, home, condo or renters coverage. The difference between the two lies in why others need coverage and how it applies.

What is an additional interest?

An additional interest is an entity, either a person or organization, that has some vested interest in the insured item. For example, if you finance your vehicle, you may be required to add the lender as an additional interest to your car insurance policy. If something were to happen to your car or your insurance lapsed, the lender would be notified.

What is an additional insured?

The term additional insured usually refers to a person or entity that is not initially included in the insurance policy but is later added to it, thereby extending the policy’s coverage to them. This person or entity typically shares a business relationship with the primary policyholder and has some financial stake in the insured property.

An additional insured is typically someone who could face legal or financial liability due to an incident involving the insured property.

The co-owner of the vehicle
A landlord
An employer

By being added to the policy, the additional insured is covered against specific risks, reducing their potential financial liability. This coverage, however, is often more limited than that for the primary insured and is tailored to specific risks associated with the relationship between the parties involved.

The most common example is a lending or leasing company. When you get a vehicle loan or lease, you are not the owner of the car, so the company is included in your insurance policy as an additional insured until the lease is over or you pay off the loan. The lender usually requires the policy to maintain certain coverage limits.

Who can be listed on a car insurance policy?

Generally, anyone who has an insurable interest in the vehicle can be listed on the policy. This could include the primary driver, other household members who drive the vehicle and even a lienholder or a co-signer.

However, the type of interest they have in the vehicle can vary significantly, and this is where the terms additional interest and additional insured come into play. It’s important to keep in mind that there isn’t a separate additional interest insurance policy, but an additional interest or additional insurance clause or endorsement added to the existing auto insurance policy.

When to add an additional insured vs. additional interest

Most insurance carriers allow you to add additional interest or additional insured parties to a variety of different insurance policies. The main difference between these two is that additional insureds are covered under the policy and additional interests are not.

Many car insurance companies use terms like named insured and listed driver when you add another person to your policy. The table below explains some of the common terms related to auto insurance policies that you may come across.

Term	Meaning
Named insured	A named insured, or driver, is usually the main policyholder. They pay the premiums and have full control over the policy.
Listed driver	A listed driver is someone who lives in your household and is permitted to drive the insured vehicle. They are covered under your policy’s terms while using your car should any incidents arise.
Additional insured	Someone who jointly owns the vehicle on the policy. This person would be covered by claims made on the vehicle and can file claims themselves. Additional insureds don’t necessarily have to be listed as drivers unless they drive the vehicle regularly. For example, say your mom is the co-owner of your vehicle, but you don’t live together. If she doesn’t drive the vehicle regularly, you would likely not list her as a driver.
Additional interest	A person or third party who has a vested interest in the vehicle, like a lienholder. An additional interest receives no coverage, but can request that certain coverage types — like full coverage — be purchased.

Will adding an additional insured affect my auto premium?

In most cases, adding an additional interest to your insurance policy will not impact your rate. Common examples of additional interest parties are co-signers on a leased car or a lending company for financed vehicles.

Adding an additional insured should not impact your premium unless the additional insured is also a listed driver on the policy. In that case, insurers will look at the driving record and claim history of any additional insured drivers when you add them. However, noting an additional insured on your auto policy mainly means that claim checks will be made out to both parties.

Additional interest vs. additional insured in other policies

You can add an additional interest or an additional insured to policies other than car insurance. Here are some other insurance policies that can have an additional insured or additional interest attached to them.

Homeowners insurance

With homeowners insurance, there are a few reasons why you might want (or need) to add either an additional interest or an additional insured to the policy. First, if you have a mortgage, your lender might require you to list them as an additional interest because they technically own the home until you pay off the loan.

Say you have a home and your mom helped you with the down payment and is a co-signer on your mortgage. If your mom moves into the mother-in-law suite of your home, then you would add her as an additional insured due to her financial stake and usage of the property. This gives both parties the opportunity to file claims.

Condo insurance

Condo insurance is similar to home insurance in many ways. If you have a mortgage or other loan on your condo, you may have to add the lender as an additional interest. If you have a domestic partner that you aren’t married to, they may be added as an additional insured for claim and coverage purposes.

Renters insurance

Renters insurance is slightly different from home and condo insurance because you do not own the physical building. If your lease agreement requires renters insurance, your landlord might ask to be added as an additional interest on your policy. This way, your landlord would be notified should your policy lapse. However, adding a landlord to a renters insurance policy is not common and is not required by law. If you have an adult child that you live with, you could also list them as an additional insured if you want to be covered under the same policy.

Frequently asked questions

An additional interest is someone like a lender or leasing company who wants to know that your car or home is insured. They don’t get any coverage from your policy; they’re just listed so they can be notified if your insurance gets canceled or your policy changes.

An additional insured is someone who needs financial protection through your insurance policy. This could be a roommate, landlord or co-owner who might be affected if something happens to the property. They’re actually covered under your policy for certain things.

The key difference is an additional interest gets updates but no coverage, while an additional insured gets some amount of coverage from your policy.
Call your insurance company, or check if you can make the change online. Tell them who you want to add and whether it’s as an additional interest or additional insured. You’ll need their name, contact info and, if it’s an additional insured, your relationship to them.

Your insurer will explain any forms, coverage changes or added costs. Once approved and paid for (if payment is necessary), the update takes effect, and additional insureds will appear on your proof of insurance.