Named Insured:
The term “Named Insured” refers to the owner of the insurance policy and it is the party listed on the Declaration’s Page. The “Named Insured” is the only party that has the authority to make any policy changes, file claims, receive refunds and claim payments, cancel the policy, or make any other such modifications.
Additional Insured:
This is probably the single most misunderstood insurance term. It is misused and misapplied on a regular basis. An “Additional Insured” is a party listed on an insurance policy that has some type of liability interest in the property. The “Additional Insured” has absolutely no right or authority to make any policy changes or to cancel the policy. Also, contrary to popular belief, an “Additional Insured” is ONLY afforded liability protection under the liability portion of the policy and there is no coverage whatsoever for physical losses resulting from such things as vandalism, theft, fire, wind and hail, and so on.
Additional Interest:
An “Additional Interest” is nothing like the “Additional Insured” though they sound similar. An “Additional Interest” is a party listed in an insurance policy that has an “interest” in being notified whenever a policy cancels or has a major change made to it. In other words, this party is simply being made aware of the change – nothing else. There is absolutely no coverage whatsoever afforded to an Additional Interest.
As you can see, there is a big legal difference between these terms, and having an interest listed incorrectly can have unintended and far-reaching consequences in the event of a loss, default, or other such situation. Your insurance agent should know the difference between these three terms, however, sometimes that is not the case and they may need to be educated.