Definition - What does Additional Interest mean?
An additional interest, in the context of insurance, refers to a third uninsured party named in an insurance policy as having an "interest" in being notified whether a policy is canceled or modified. This party is made aware of a change and does not receive any coverage whatsoever. However, depending on the insurer, they may use the term interchangeably with additional insured, although these two terms are technically different.
Insuranceopedia explains Additional Interest
In contrast, an additional insured would receive coverage from the primary insured's policy, while the additional interest would only be made aware of changes to the policy. Therefore, it is important for all parties involved to carefully read their policy and consult with their insurer to make sure they understand the differences as the usage may depend on the specific insurer, with some using both words to mean the same.
Additional interests are commonly named in property insurance policies wherein multiple parties own, lease, or are otherwise using the property. This is to ensure that other parties who would be affected by a change in coverage or loss of coverage of the primary insured is made aware of the change.