What's differance between Additional named insured vs. lienholder for property insurance?

Question

When a mortgage holder is put on the property insurance policy, should they be an "additional named insured" or a lienholder? Which way really protects them if there is damage to property?

Answer 1

OK, "leinholder" is property for mobile property. It means, if that particular piece of property is damaged, the check gets made payable to the leinholder and the owner jointly.

Mortgagee is for "real property", or real estate. There are MORE protections offered to a mortgagee than a leinholder - like if there is fraud, such as arson, the MORTGAGEE still gets paid up to their interest, the insured gets NOTHING, and a lienholder would get nothing, also.

An additional named insured, is a part policy owner. You'll have a hard time getting an insurance company to name a partial interest, such as leinholder or mortgagee, as additional named insured. Usually you see it on something like a triple net lease, when a commercial landlord requires the commercial tenant to carry the building insurance as part of the lease, then name the landlord as "additional named insured". It's a rotten way to protect the landlord's interest, as the tenant can let the policy lapse and then they're uninsured after all.

You need to sit down with your agent, explain the exact relationship status, define the property and the useage, to determine the appropriate insurance endorsements to cover your interests.

Answer 2

An Additional Named insured has all the rights of the Named insured under a policy of insurance. A lienholder is protected only if something happens to the property.

The additonal named insured is provided usually with liability coverages, also, medical payments, etc. Unfortunately, if the insured screws up, damages the property say via fire, the additonal named insured cannot usually present a claim against the first insured (both are insureds under the policy, and you can't sue yourself). There are some advantages to being an Additional named insured, because you do also have liability insurance.

If your only interest is protecting the property itself, and you have no concerns about liabilty because you did not own the property but just hold the Lein, then just being placed as a leinholder should suffice. Most insurance companies give the leinholder a notice of cancellation prior to cancelling the policy, so that the leinholder has the right to pay the premium and continue the policy.

Also, if you are a leinholder or mortgagee, your name is on the settlement check if something happens to the property. That way you can make sure the repairs are done. That protects your interests.

As you can see, there are benefits to both, it depends on what your intent is when you get the insurance.

So...talk to the agent you are working with and see what they recommend. They are the professionals.

Answer 3

Named Insured Vs Additional Insured

Answer 4

Loss Payee Vs Additional Insured

Answer 5

An additional insured is a co-owner of the property (on the deed) that normally lives elsewhere. The additional insured endorsement provides building, other structures, liability and medical payments coverage. A loss payee, lienholder or mortgagee is an entity with which you have a loan. They would have building and other structures coverage to cover their interest in the property and to be paid (first) for any covered loss to the building(s).

Answer 6

An additional named insured would be someone who owns the property jointly with you, while a lienholder would be someone you owe money to who has taken you to court and won a lien ( meaning whenever you sell the home, they're guaranteed their repayment) against your property.

Answer 7

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Answer 8

Was asking myself the same thing

Answer 9

Was wondering this too