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An interested party on a renters insurance policy is someone who is notified by your renters insurance provider that you have coverage, and they will be notified if you cancel or make a change to your policy. In most cases, an interested party will be your landlord, in order to confirm that you have renters insurance—a common requirement for renting an apartment or house. An interested party is also sometimes called an "additional interested" or "third party designee." Being named as an interested party doesn't allow your landlord to make a claim on or make changes to your renters insurance—it only entitles them to know the status of your policy.
Why Do Landlords Require You to List Them As Interested Parties on Renters Insurance?
It's increasingly common for landlords to require tenants to purchase renters insurance, as it limits the financial liability of both the landlord and the tenant in case an accident occurs. If you have to buy renters insurance as a condition of your lease, noting your landlord an interested party will provide them with proof that you've purchased a sufficient amount of renters insurance coverage.
How Do I Add a Renters Insurance Interested Party?
Noting your landlord as an interested party to your renters insurance policy is straightforward, though the process may differ slightly by insurance company. Most renters insurance companies, including State Farm, GEICO and Lemonade, allow you to add an interested party online. You'll just need to provide your landlord's contact information, including their name, address and email. Your landlord will get a description of your renters policy via email or regular mail shortly after you add them as an interested party.
Adding a renters insurance interested party is typically free. If you find a renters insurance company that charges more than a dollar or two per month to add an interested party, consider looking elsewhere for a better deal on renters insurance, as even a few dollars per month will add up to a significant increase in the cost of insurance.
The Difference Between Additional Interest and Additional Insured
"Additional Interest" and "additional Insured" are two similar-sounding terms related to renters insurance that have very different meanings. Additional interest is simply another name for an interested party—someone who wants to know whether you have renters insurance. It's common to add your landlord as an additional interest.
"Additional insured," on the other hand, is another person covered by your policy, and adding your landlord as an additional insured is a very bad idea—for you, your landlord and your insurance company. In fact, most renters insurance companies won't let you list your landlord as an additional insured at all.
If you add someone to your policy as an additional insured, it means they are protected by your policy's liability coverage. You might commonly add your spouse or your roommate as an additional insured, so that you're all protected under the same policy. If you add your roommate to your policy and a visitor is injured by your roommate's dog, the liability policy would cover any damages.
However, adding your landlord as an additional insured makes it impossible for either of you to make a claim against one another's liability policies for damages. For example, if faulty wiring causes a fire in your apartment, you and your insurance company would normally sue your landlord and their insurance company to cover the less. But if you and your landlord are protected by the same policy, you're prevented from suing your landlord—it'd be like suing yourself or your spouse. And this works both ways: If you're the one responsible for the fire, the landlord would be unable to sue you for damages because you're both protected by the same policy.
If your landlord requests you to add them as an "additional insured" to your renters policy, they likely mean "additional interested." Clarify what they mean before adding them as an additional insured under your renters insurance.