Renters Insurance Additional Interest: What You Need to Know
- Renters Insurance Additional Interest: What You Need to Know
No need to worry. Below, we break down everything you need to know about an additional interest on an insurance policy, including how it works and why you may need to add one in the first place.
Additional Interest Definition
In insurance, an additional interest on a plan is a party that will be notified of any changes to the policy while not being insured by it. If you add an additional interest to your insurance plan, the additional interest would be notified if you cancel, renew, or modify your policy. This includes if you reduce coverage or if your plan lapses.
An additional interest doesn’t receive any coverage under your plan. This means they can’t file claims under your policy and receive reimbursement from your insurer (unless, of course, they file a liability claim against you if they’re injured on your property, which anyone can do). An additional interest also can’t make any changes to your policy. They simply receive notifications about what you do with it.
Be careful not to confuse additional interest with an additional insured. It sounds similar, but they’re quite different. Basically, an additional insured would receive coverage under your policy, while an additional interest doesn’t.
You probably don’t want to add anyone as an additional insured to your policy since your insurer would be extending protection to them. Additional insured status is usually found in working relationships between two businesses.
What Is an Additional Interest on Renters Insurance?
You might find someone requesting additional interest status any time a person or company is handing their investment over to someone else to use. For example, a mortgage company might want to be named as an additional interest on your home insurance since they partially own your house, or the company that’s financing your car might want to be an additional interest on your car insurance so they know your car (their investment) is protected.
Additional interest is particularly common in renters insurance, though. Before allowing a tenant to move in, it’s common for a landlord to require their tenant to get renters insurance. They may ask for proof of insurance to show you got a policy, but they may also ask to be added as an additional interest on your plan to know that you keep it.
If a landlord solely asks for proof of insurance when you move in, there’s no way to know that you won’t cancel the policy shortly after. As an additional interest, your landlord will be notified if you reduce or cancel your renters insurance coverage throughout your time as a renter.
How to Add an Additional Interest
It’s typically simple to add an additional interest to your policy. Many insurance companies let you do it online and free of charge. All you’ll need is the accurate contact information for the additional interest you want to add, like their name and address.
If you can’t do it online, just contact your provider and tell them you wish to add one. It should be pretty straightforward and shouldn’t cost much if anything. If there is a fee, it would likely only be a few dollars. Since it won’t be affecting your coverage or increasing your premium, it isn’t a strenuous process.
You can add an additional interest to your plan at any time, but, as we said before, your landlord or property management company will typically ask to be added before you move in.
Averaging just $12 per month, renters insurance can protect your belongings for the cost of a few cups of coffee.
The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.