What Does Additional Interest Mean?
An additional interest, in the context of insurance, refers to an uninsured third party named in an insurance policy as having an “interest” in being notified if the policy is ever canceled or modified. While this party is made aware of changes, they do not receive any coverage whatsoever.
Some insurers, however, use the term interchangeably with “additional insured,” although the two are technically different.
Insuranceopedia Explains Additional Interest
Unlike an additional interest, 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. Given the major difference between these two similar terms, it is important for all parties involved to carefully read their policy documents and consult with their insurer to make sure they understand the differences, especially since the usage may depend on the specific insurer.
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 are kept updated on the policy details.