This month’s W : “WHO”
Many people take for granted or just don’t know how their personal insurance works. It is vitally important to know the basics of insurance as a consumer. Of course, your agent should be your resource for more detailed or complicated knowledge on insurance. It might be beneficial to look at the 5 W’s of insurance to gain an understanding of the basics of how your homeowners and auto insurance works. This month we will take a look at the first W: “WHO”!
WHO is covered?
Let’s look at the definition of an “insured” according to the policy. Think of the “insured” as the customer.
The most obvious person that is covered is called the “named insured” or the person or persons that are actually listed on the declaration page of the policy. In the case of married couples, sometimes the “named insured” is the husband, sometimes it is the wife, and sometimes both names are listed. It is important to note that while coverage is extended to a spouse that is not specifically named, only the named insured can file a claim, change the policy, cancel the policy, and is the person responsible for payment of the premium. Note that in order to be a named insured on a policy, you must have an insurable interest in the property. This is why your mortgagee must be named on the declaration page of your policy.
However, unlike commercial insurance, the “insured” on a homeowners policy may include more than just the “named insured” (listed on the dec page). Also included in the category of “insured” is any relative that “resides” with the person listed on the dec page. Most courts consider unmarried college students to be “residents” of their parents’ household, as long as they resided in the parents’ home prior to going to college, attend school full time, and are under the age of 24. Also included in the definition of “insured” are foster children and foreign exchange students under the age of 21 in the named insured’s care who live with the named insured.
In the homeowners policy, there is also some liability-only protection for others: anyone with custody of an insured’s watercraft or animals, insured’s employees or relatives using a covered vehicle, and other people using a covered vehicle on an insured location
In the case of an auto policy, you have coverage for the named insured as well as residents of your household related to you by blood, marriage or adoption. Also included are foster children who reside in your household and your spouse even when not a resident of your household (such as during a period of separate in contemplation of divorce). You are covered to drive ANY vehicle, not just those listed in the policy. There is also coverage given for ANY person driving “your covered auto”, or the auto listed in the declaration page of the policy with your permission.
Next month we will look at the next “W” in our series: “WHAT”!
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Eric Fite, VP Judge Fite Insurance