The word “underwriting” is a commonly noted term, but many people have no idea what underwriting means or how it pertains to the insurance industry. Underwriters assess many variables when considering whether the risk of the applicant is worth it and at what cost. Any time you apply for insurance, there is a very specific process before an approval or denial is executed. Because underwriting is a key part of the insurance approval process, you need to know what a “named insured” means in relation to an insurance policy.
The Rights of a Named Insured on an Insurance Policy
A named insured is a person, person(s) or business that is designated by name on the Declarations Page of any business and/or personal insurance policies. Being named as the “named insured” gives you the right to oversee the policy; that is, to pay the premium, make any necessary changes/amendments, make claims, cancel, or add endorsements. While underwriters contemplate risks when deciding to accept or deny a potential applicant, they many times incorrectly add multiple named insureds and this is when it can get complicated. Before other named insureds get added to a policy, there needs to be some considerations given before agreeing to accept this risk.
Below are Some Key Considerations Before Accepting Risks of Adding Additional Named Insureds
Combinability- The underwriter must validate whether the named insureds are combinable. Common majority ownership means a person or group of people own more than 50 percent of each entity. They must share “common majority interest”, or it could lead to substantial problems and shouldn’t be written.
Insurable Interest- Persons, businesses, or firms must have an insurable interest before being added to a policy as an additional named insured. Insurable interest means if a loss happens, that person or business would suffer a financial loss or hardship.
Once those two considerations have been justified, the underwriter should feel comfortable adding the additional named insured(s). However, it should be noted that the first named insured is still the one in charge to oversee the policy. Without verification of these elements, it could lead to legal issues among the entities.
Contact Cameron Group Insurance Today!
If you have any concerns or questions regarding the underwriting process of named insureds and additional insureds, we are here to help. You can count on our specialized underwriters to validate insurable interest for each named insured and can help with any concerns of whether to add other named insureds to the policy. We are here for all your New York insurance needs. Don’t wait! Call us today at 845-627-2130.