Additional interest definition

What is an additional interest?

An additional interest is a person or organization listed on your insurance policy who has a financial stake in the property, but they’re not actually covered by the insurance. Instead, they’re kept in the loop. If your policy changes, lapses or is canceled, they’ll get a heads-up.

You might also hear the term interested party. It’s the same thing. This is commonly required by landlords, lenders or leasing companies who want to stay informed without needing coverage themselves.

For example, if you rent an apartment, your landlord might ask to be listed as an additional interest on your renters insurance policy. That way, they know you’ve got active coverage and their property is protected.

In auto insurance, lenders or leasing companies are often added as additional interests. If your coverage stops, they’ll be notified so they can take steps to protect their investment.

Why would someone be added as an additional interest?

Most of the time, it comes down to protecting money. If someone has a financial interest in your home, car or rental, they want to make sure it’s insured in case something goes wrong. Insurance gives them peace of mind that their investment won’t be lost if there's damage, theft or a lapse in coverage.

Who can be listed as an additional interest?

Anyone with a financial or legal connection to the insured item can typically be listed as an additional interest. This means they have something at stake if the property is damaged or the policy lapses. Common examples include:

• Mortgage lenders or banks – They have a stake in your home until it’s paid off.
• Landlords or property managers – This is especially true if they require renters insurance.
• Auto loan providers – They want assurance that a vehicle stays covered.
• Leasing companies – When you lease a car or property they own, they want to be sure it’s protected.

They don’t get coverage under your policy, but they do receive updates if anything changes.

Additional interest vs. additional insured

These two terms sound similar, but they mean very different things, and only one comes with coverage. Knowing the difference can help you avoid confusion and make sure the right people are listed on your policy in the right way.

An additional interest is simply notified about changes to the policy. That’s it. No coverage, no claims and no liability protection.

An additional insured, on the other hand, is actually covered by the policy. They can get liability protection if they’re named, which is more common in business or contractor policies. For example, a landlord might request additional insured status if they want liability coverage under your renters policy.

In short:

Additional interest means they are kept informed.

Additional insured means they are actually insured.

Additional interest on home or renters insurance

If you’re renting, your lease might require you to list your landlord or property manager as an additional interest. This way, they’ll get notified if you cancel your policy or forget to renew, giving them peace of mind that their property is still protected.

Homeowners may also need to add additional interests if a bank or lender is involved in the mortgage process.

In both cases, the additional interest doesn’t get coverage, but they do stay in the loop.

Additional interest on auto insurance

Cars often come with loans, leases or financing agreements, which is where additional interests come in. A lender or leasing company may ask to be added to your auto insurance policy so they’re notified if your coverage lapses or ends.

That way, if the car isn’t insured, they can take steps to protect their financial stake.

They won’t be able to file claims or receive any payout, but they’ll know the status of your policy at all times.

Renters insurance and additional interest

Renters insurance covers personal belongings, liability and temporary living expenses if something unexpected happens, like a fire or break-in. It’s designed to protect both you and your space, whether you live alone or share the rental. In some cases, it can also include:

• Additional interest – Like your landlord, who wants to be notified if you cancel
• Additional insured – Like a roommate or domestic partner, who needs coverage

Every insurance carrier is a little different, so it’s a good idea to read your policy closely. Some insurers charge a small fee to add an additional interest. Others include it at no extra cost.

Either way, compare policies and coverage levels to find what fits your needs and your budget.

What does an additional interest receive?

Here’s what an additional interest does and does not get when they’re listed on your policy. They’re included for notification purposes only, not for coverage or benefits. It’s important to understand this distinction so everyone knows what to expect.

They receive:

• Notifications of policy changes, cancellations or nonrenewal
• Proof that the policy exists

They do not receive:

• Insurance payouts or claim money
• Legal protection or liability coverage
• The ability to file a claim

Think of it as a courtesy role. They are kept in the loop, not protected by the policy.

Will adding an additional interest affect my premium?

In most cases, no. Adding an additional interest doesn’t change your premium because it doesn’t affect your coverage. It just shares policy status with someone else.

That said, some insurance companies might charge a small service fee to update your policy. Be sure to ask when adding someone.

Adding an additional insured, on the other hand, usually increases your premium slightly since it expands your coverage.

How do you add an additional interest?

It’s usually pretty simple. You can contact your VIU by HUB Advisor, call your insurance company or update your policy online. You’ll need to share:

• The name of the person or business
• Their mailing address
• Their relationship to the property

Need help? A licensed VIU by HUB Advisor can walk you through it and make sure everything is set up correctly.

Can you remove an additional interest?

Yes, you can remove them when they no longer have a financial stake in the insured property. Once their involvement ends, there’s no longer a need for them to stay informed about the policy. That might include situations like:

• You pay off your auto loan or mortgage
• A lease or rental agreement ends
• A co-owner sells their share or moves out

Contact your insurance company to confirm the change and make sure it’s properly reflected in your policy.

Is an additional interest the same as a policyholder?

No. The policyholder is the person who owns the insurance policy and has full control over it, including decisions about coverage and changes. They are the one who:

• Pays the premium
• Makes policy changes
• Files claims

An additional interest just gets notified about updates. They don’t have any say in what the policy does or doesn’t cover.

What if you see an unfamiliar additional interest on your policy?

If a name pops up on your policy and you don’t recognize it, contact your insurance company right away to avoid any confusion or potential issues. An unfamiliar name might mean there was an error during setup or a leftover from a past agreement. It could be:

• A mistake or leftover from a past loan
• An error during the setup of your policy
• A third party added without your consent

Double-check your lease or loan documents to confirm who should be listed, and get any unfamiliar names removed promptly.

FAQs

Is an additional interest the same as a loss payee?

Not quite. An additional interest only receives policy updates. A loss payee actually receives payment in the event of a claim, like a lender who gets reimbursed if a financed car is totaled.

Can you have more than one additional interest on a policy?

Yes. For example, both a property manager and a landlord can be listed on a renters policy. They’ll each get notified of cancellations or changes, but no one receives coverage.

Does an additional interest need to approve their removal?

No. Only the policyholder can add or remove additional interests. It’s a good idea to notify them if you’re ending a financial agreement, but legally, their permission isn’t required.