Insurance interested party definition

One requirement for all insurance contracts is that the named insured (the person who purchases the policy) has an insurable interest in the person or property to be covered. Other people, called "interested parties" or "additional interests," may share insurable interest.

Interested Party Definition

An "interested party" or "additional interest" is a person or company other than the named insured on a policy, which has an insurable interest in the person or property covered by the policy.

Insurable Interest Definition

"Insurable interest" means that the person or company stand to suffer a financial loss if the covered person dies or the covered property is damaged or destroyed.

Examples

If you take out a loan for a vehicle purchase, the lender is an "interested party" because it could lose money if the car was destroyed and you were unable to repay the loan. Similarly, a mortgage lender would be an "interested party" on a homeowner's insurance policy.

Notification

An insurance company typically notifies an "interested party" in writing if the policy is amended or cancelled.

Payment Rights

An "interested party" may be an insured party under the policy, or may be listed on the policy as a "loss payee," which provides certain rights to claims payments.

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About the Author

Owen Pearson is a freelance writer who began writing professionally in 2001, focusing on nutritional and health topics. After selling abstract art online for five years, Pearson published a nonfiction book detailing the process of building a successful online art business. Pearson obtained a bachelor's degree in art from the University of Rio Grande in 1997.

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