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What's the difference between Additional Insured and Additional Interest

When you buy a home, condo, or renters insurance, you will often need to list any additional insured or additional interest on the policy. These terms often get interchanged outside of insurance, but they have VERY different definitions in the insurance world.

Additional Insured - The entity or person listed on the declarations page as an additional insured is also financially protected against the damages on the underlying property. When you buy a house, your lender who loans you 80% of the value of your home wants to be an additional insured on your home insurance. They want to make sure the loan is protected if your house burns down tomorrow. They will often be in the mortgagee clause, which is common when buying home insurance.

Additional Interest - The entity or person listed on the declarations page gets a notice if you cancel or change your coverage. Still, they have no financial benefit from the insurance coverage. An additional interest is most common in renters insurance when the property manager wants to verify the tenant carries renters insurance during the rental term. They want tenants to have liability coverage in their renters policy. So if you accidentally leave the water running and it floods the three units below, doing $50,000 in damages, the property manager can "sue" you, the tenant, and recoup the losses from the insurance company.

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Of course, you would never be this foolish!

At your service,
Young Alfred