Named Insured Vs. Additional Insured

BTFuzz

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Anyone know what the different policy benefits are on an auto policy between a first named insured and an additional insured?

I had a potential situation recently with a policyholder and an owned Trust that raised this discussion as this guy thought he could actually list the Trust as the named insured and him as the additional.

I changed his mind, however what are the legal difference bulletpoints?
 
An example is that usually, a Named Insured is only covered for Uninsured Motorist unless Additional Insured coverage is specifically endorsed.
 
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  • The named insured in the auto policy is the owner of the vehicle.
  • A auto policy endorsement is required to be named as an additional insured. A typical auto policy additional insured endorsement is the lessor of a vehicle.
  • In a commercial liability policy the "first named insured" terminoloy appears in the definitions. :)
 
  • The named insured in the auto policy is the owner of the vehicle.
  • A auto policy endorsement is required to be named as an additional insured. A typical auto policy additional insured endorsement is the lessor of a vehicle.
  • In a commercial liability policy the "first named insured" terminoloy appears in the definitions. :)

Understood....however, where does the protection differ? Does the additional insured receive the same bennies as the named insured as far as coverage goes? Talking personal auto here...
 
Understood....however, where does the protection differ? Does the additional insured receive the same bennies as the named insured as far as coverage goes? Talking personal auto here...

The additional insured endorsement requires the named insured's insurance company to provide liability coverage to the additional interest. A lienholder or loss payee endorsement requires the named insured's insurance company to include the additional interest on the proceeds of physical damage loss. :)
 
Understood....however, where does the protection differ? Does the additional insured receive the same bennies as the named insured as far as coverage goes? Talking personal auto here...

The coverage provided to the additional insured isn't even close to what's provided for the named insured.

First, coverage is only triggered for the additional insured in conjunction with a claim or suit against the named insured. If the suit papers only come against the individual (the additional insured), no coverage exists under the policy; the suit must name the trust if the individual is to have any coverage.

Second, most standard auto policies automatically extend coverage for rental cars and other non-owned vehicles to named insureds, their spouses, and sometimes their children. When your policyholder vacations, I doubt he's renting the car in the trust's name.

Third, I have some doubts that a trust can even be listed as a named insured on a personal auto policy. This is an eligibility question for your carrier.

Fourth, I also have some doubts about PIP and UM/UIM extending to an individual owner of a trust under a personal policy. Read through the definitions of "you", "who is an insured", etc. Generally speaking, these are limited to named insureds, spouses, resident relatives, etc. How does the individual owner of a trust fit in? I have no idea. Under a commercial auto, language is much more inclusive as that's intended to cover employees.

Bottom line, a personal auto policy isn't equipped to properly cover the individual in a situation like this. It has to be commercial. Your client is apparently rather well off and should be interested to hear about these possibly uncovered claims, the costs of which make the extra premium for a commercial auto policy seem very small.
 
The coverage provided to the additional insured isn't even close to what's provided for the named insured.

First, coverage is only triggered for the additional insured in conjunction with a claim or suit against the named insured. If the suit papers only come against the individual (the additional insured), no coverage exists under the policy; the suit must name the trust if the individual is to have any coverage.

Second, most standard auto policies automatically extend coverage for rental cars and other non-owned vehicles to named insureds, their spouses, and sometimes their children. When your policyholder vacations, I doubt he's renting the car in the trust's name.

Third, I have some doubts that a trust can even be listed as a named insured on a personal auto policy. This is an eligibility question for your carrier.

Fourth, I also have some doubts about PIP and UM/UIM extending to an individual owner of a trust under a personal policy. Read through the definitions of "you", "who is an insured", etc. Generally speaking, these are limited to named insureds, spouses, resident relatives, etc. How does the individual owner of a trust fit in? I have no idea. Under a commercial auto, language is much more inclusive as that's intended to cover employees.

Bottom line, a personal auto policy isn't equipped to properly cover the individual in a situation like this. It has to be commercial. Your client is apparently rather well off and should be interested to hear about these possibly uncovered claims, the costs of which make the extra premium for a commercial auto policy seem very small.

Now that's the response I was looking for! I assumed a lot of what you said but needed some reassurance. Thanks!
 
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