The Name Game


What is the importance of the name on an insurance policy? It turns out there is plenty of importance because the coverage is going to respond to the person or entity listed as the named insured and any others that are included by definition in the contract – and nobody else. For instance, I find that many homeowner policies list just the husband as the named insured. Yes, the spouse and any relatives are included as insureds – but only if they live in the residence premises. What happens if there is a separation and the wife moves out? If she is not listed specifically on the policy, she has no coverage because she is no longer a resident. I am also finding that LLCs are becoming popular as an ownership mechanism for property – presumably to hide the identity of the owner from others who are not exactly friends. Some think that the LLC will provide a shield from liability. Not so fast on that one. There may be protection from creditors but not necessarily for a bodily injury incident. Many landlords think that by being added as an “additional insured” on their tenant’s policy, there is no need to carry insurance for themselves. The additional insured status will provide protection if the landlord is brought in on a suit that is due to the negligence of the tenant. However, if the claim is a result of something the landlord did or didn’t do, there is no coverage and therefore a separate policy for the owner/landlord is necessary. Then there is the unfortunate situation of the life insurance policy where the beneficiary was selected years ago – and not amended. So the proceeds of the policy go to the ex-wife or the long gone partner instead of the intended person or organization. Dale Carnegie said in “How to Win Friends and Influence People” that a person’s name is to that person the sweetest and most important sound in any language. In the insurance world the accuracy of a name is equally as sweet and important.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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