The ongoing pandemic has made one fact clear: No matter how much we earn, it’s extremely important to manage our personal finances in an efficient manner. The spectrum of the insurance industry is so vast that it is hardly possible for an individual to know all the nitty-gritties. However, one should always assess the terms and conditions of any insurance policy carefully before buying it — and “named insured” is one such topic about which most people do not have adequate clarity.
What is ‘named insured’?
A “named insured” can be any individual, firm or any of its members specifically designated as an insured representative under an insurance policy. Simply said, it means the owner of the policy.
The named insured is a mediator between the other insured people under the policy and the insurance company. All the issues pertaining to the insurance policy are handled by the named insured directly with the insurance company.
In some insurance situations, it becomes pertinent to determine whether some individual or organization was the ‘named insured’ under the relevant policy, for purposes of formulating the policy amenities extending coverage to or excluding coverage of ‘named insureds.’ All insurance policies have a separate column in their Declarations section printed as ‘named insured’ followed by a space to enter the name or names of the appropriate individual or firm. Some policies however have an extra provision in their Definitions section to include the name of the spouse under the column of ‘named insured,’ in addition to the actual person registered, provided the spouse is a resident of the same household.
Who is not a ‘named insured’?
There are definitions of named insured provided almost everywhere. However, it becomes too difficult to delineate what falls under the ambit of named insured and what doesn’t. In case of car insurance policy, all drivers living in the same household who are not the authorized owners of the car and all those who are not married to the owner cannot be registered as ‘name insured.’ Unwed spouses, or partners also don’t fall under the category of Name Insured. The common confusion arises in understanding the features of named insured vs additional insured; these examples constitute the latter.
In addition, any children in the same household would also not be considered as named insured. Additional confusion often leads to questions as to whether a person was a spouse solely for the purpose of the facilities extending coverage to or excluding coverage of named insured. There are also issues when it becomes difficult to assess whether a person who truly was the spouse, was also a resident of the same household.
At times insurance is also denied on grounds of the ‘non-owned automobile’ provision, which extends the coverage of insurance to a vehicle not owned by the named insured, under the condition that the vehicle being used at the time of accident was owned by a spouse. Courts sometimes deny insurance coverage under the ‘temporary substitute automobile’ provision, according to which the temporary automobile concerned should not be owned by the named insured — for example a vehicle owned by the spouse of the named insured who, once again by definition, is also a named insured.
Some courts however have regarded the provision of including a resident spouse as named insured impractical as it deprives other spouses of the benefits that would be available under the insurance policy. The ambiguity of the residency factor in the definition has led to questions in other contexts. For example, whether a person involved in an accident caused by an uninsured motorist — who is a resident of the same household as the named insured — would be entitled to get the benefits under uninsured motorist coverage.
What happens if you meet with an accident?
Car accidents are ghastly, but what’s even scarier is when corresponding medical and emergency needs must be catered to — this is when legal advice comes in particularly handy. So it is important to find attorneys who are experienced in this area so proportionate compensation can be provided.
Photo Credit: David Hilowitz