Insured And Additional Driver: Understanding The Distinction

When it comes to car insurance, the named insured is the person who is listed on the policy and ID cards, while an additional driver is someone who resides with the named insured and regularly uses the shared vehicle. The named insured is the one who purchases the insurance policy, makes changes to it, and is responsible for paying the premiums. On the other hand, an additional driver does not have the same rights and responsibilities as the named insured and is only covered when driving the vehicle in the policy.

Characteristics of a Named Insured and an Additional Driver

Named insured vs additional insured

A "named insured" is the person or firm whose name appears at the top or on the first page of an insurance contract and who receives all the protections of the insurance policy. They are also called a policyholder or primary insured. In the case of car insurance, the named insured is usually the owner and the registered owner of the vehicle. They are responsible for making and approving policy changes, verifying claim details, and paying premiums. The insurance company also writes checks to them in the event of a loss.

An "additional insured" or "additional driver" is a person who resides with the named insured and/or regularly uses a shared vehicle. Their record is used in underwriting the policy to determine rates, but the person has no policy rights. They are not responsible for paying premiums and cannot make changes to the policy. They are only covered when driving the vehicle in the policy.

In the case of a small business, the named insured is usually the party responsible for purchasing the policy, making decisions about it, and paying the premiums for the business. The named insured can be an individual or a firm. An additional insured, in this case, is typically a party close to the policy owner with similar risks and interests, such as partners, co-owners, or even family members of the named insureds.

It is important to note that the definitions of "named insured" and "additional insured" may vary depending on the insurance company and the specific policy. It is always best to check with your insurance company for details and clarify the differences in your particular policy.

Who can make changes to a policy?

In the context of car insurance, the named insured is typically the owner of the vehicle and the individual who purchases the insurance policy. They are responsible for making and approving changes to the policy, verifying claim details, and paying premiums. The named insured is also the person who receives insurance payouts in the event of a loss.

Additional drivers, on the other hand, are individuals who are authorised to drive the insured vehicle but do not own it or pay the insurance premiums. They are not responsible for making changes to the policy and typically cannot modify it without the approval of the named insured.

In the case of joint ownership of a vehicle, both owners can be listed as named insureds on the policy. In such cases, both individuals have the same rights and responsibilities under the insurance contract, including the ability to make changes to the policy.

It is important to note that the specific rights and responsibilities of the named insured and additional drivers may vary depending on the insurance provider and the jurisdiction. Therefore, it is always advisable to carefully review the terms of the insurance policy and consult with a licensed insurance professional to understand the specific details of one's policy.

To summarise, the named insured is typically the owner of the vehicle and has the authority to make changes to the policy, while additional drivers are authorised drivers who do not have the same level of decision-making power over the policy.

Who is responsible for paying premiums?

The named insured is the person or firm whose name appears at the top or on the first page of an insurance contract and who receives all the protections of the insurance policy. They are also called the policyholder or primary insured. In the case of small business insurance, the named insured is usually the party responsible for purchasing the policy, making decisions about it, and paying the premiums for the business. For instance, if a small business owner purchases restaurant insurance for their business, the business would be the named insured and would be responsible for paying the premiums.

An additional driver is a person who resides with the named insured and/or regularly uses a shared vehicle. Their record is used in underwriting the policy to determine rates, but they have no policy rights. Additional drivers are not responsible for paying premiums and cannot make changes to the policy. They are only covered on the vehicle they are listed under.

In some cases, there can be more than one named insured driver per policy. For example, if a vehicle is jointly owned by a couple, both individuals can be listed and named as the insured and would be responsible for paying the premiums. In such cases, the insurance provider will evaluate both the driving records and risk factors separately to determine an appropriate premium. They will also assess whose driving habits to base the premium on primarily.

In summary, the named insured is generally responsible for paying the premiums, while additional drivers are not. However, in cases where there are multiple named insured individuals on a policy, each named insured may be responsible for paying the premiums.

Who is covered by the policy?

A named insured person is the primary insured, also known as the policyholder. This is the person whose name appears at the top or on the first page of an insurance contract and who receives all the protections of the insurance policy. They are responsible for making and approving policy changes, verifying claim details, and paying premiums. In the event of a loss, the insurer writes the cheque in the name of the named insured. The named insured is usually the owner or registrant of the insured vehicle. In the case of a business, the named insured is the party responsible for purchasing the policy.

A policy can have more than one named insured. For example, spouses often choose to be listed together as named insured drivers. In the case of a business, the named insured could be the owners or subsidiaries of the business. However, the first named insured is usually the one who holds primary responsibility.

An additional insured person is someone who is added to an insurance policy after it has already begun. They are covered by the policy, but with limitations. For example, incidents must be related to a named insured's work and responsibilities to be covered. Additional insured persons are often added as an addendum to the contract. They are typically a party close to the policy owner with similar risks and interests. In the case of a business, additional insured persons often include partners, co-owners, or even family members of the named insured.

An additional driver, also known as an insured driver, is someone who is listed on the policy and is authorised to drive the insured vehicle. They are usually household members of driving age. Additional drivers are covered only when driving the vehicle in the policy. They are not responsible for paying premiums and cannot make changes to the policy.

Tort status and tort election

Firstly, it is crucial to understand the roles of each party. A "named insured" is the primary policyholder and is typically the person listed on the insurance policy and ID cards. They have the authority to make changes to the policy, including adding or deleting vehicles, and are responsible for paying premiums. In the event of a loss or claim, the insurer issues a cheque in the name of the "named insured". On the other hand, an "additional driver" is a person who resides with or shares a vehicle with the "named insured". Their driving record is considered when underwriting the policy to determine rates, but they do not have the same policy rights as the "named insured". "Additional drivers" are only covered by the insurance policy for the specific vehicle they are listed under.

Now, let's delve into the concept of tort status and tort election. A tort is a civil wrong that causes someone else to suffer loss or harm, and it can result in legal liability. In the context of insurance, specifically in Pennsylvania, the "limited tort" option and the "full tort" option are available. The "limited tort" option restricts the policyholder's right and the right of their household members to seek financial compensation for injuries caused by other drivers. With this option, they can only seek recovery for medical and out-of-pocket expenses, excluding pain and suffering or other non-monetary damages. The "full tort" option, on the other hand, allows the policyholder to retain their full right to sue for non-economic damages. This option typically comes with a higher premium.

The tort election process involves the "named insured" choosing between the "limited tort" and "full tort" options. This election is only applicable to the "named insured" and resident relatives of the "named insured". "Additional drivers" are not bound by the tort election made by the "named insured". This distinction has been upheld by courts, preventing insurance companies from imposing limited tort status on "additional drivers".

It is important to note that the "limited tort" option requires a signed waiver form from the "named insured". In the absence of a signed waiver, the default setting is considered to be the "full tort" option. The "named insured" must carefully consider their choice, as it will impact their legal rights and those of their household members in the event of an accident.

In summary, the tort status and tort election process primarily concerns the "named insured", who has the responsibility of choosing between the "limited tort" and "full tort" options. This decision has implications for their insurance coverage and legal rights in the event of a motor vehicle accident. "Additional drivers" are not subject to the same tort election and are free from the policyholder's tort selection.

Frequently asked questions