What is in a Name?

The name can mean everything or nothing in an insurance policy. The short answer is "Not named? No coverage?

They do make it easy on you. There is a list of no brainer people and entities that do not need to be named specifically because it is assumed that they exist. For example a company always has a president. More generally they have officers, stockholders and employees so the policy allows for that.

But what if your organization deviates from that with volunteers, interns or students? It is important to have all those details tucked in neatly well ahead of a claim. Ultimately you are buying peace of mind. You don't get that if you are waiting to find out if the carrier is going to be gracious and include people that are not automatically covered. Counting on gracious when many thousands of dollars are at stake is not smart.

Or, perhaps your CPA or financial advisor told you to own your equipment or building in another entity and pay that entity rent. This is a smart move in terms of taxes and protects assets. Not so much on your insurance without taking the time to name names. You see, the insurance company uses naming to control the scope of coverage so they can estimate costs and know what to charge you. They are not setting out to be punitive, just precise.

Lots of folks go to seminars where they chirp about LLC's, Trust's and hiding your assets. Again, you need proper naming on your policy to know you have coverage when the chips are down. A mistake creates a situation where you have to pay a lawyer to look after the interests of the missing name or worse invalidates the protection that was intended to be provided by using all those Trusts and LLC's.

On personal insurance the automatic part of naming can be a trap. The policy says "resident relatives" are insured. What about divorce where you are likely not a resident and will soon not be a relative? Likewise there is a trap when fledging your children. You get a big gap when they attempt to insure their new car on your policy when the child does not live at home. The gap is smaller when they reside elsewhere and drive a car you own. The child with your car is covered but has no rights to grant coverage to someone else. A prime example is a boyfriend driving your daughter's car on a date.

All that said, I am speaking of the policies I write and you need to ask your agent how this squares with what they wrote for you. Sometimes there is a gulf between what you buy from a one-eight-hundred-save-15-percent source and what an Independent Insurance Agent can provide for you. We are wired to serve so call and let us know how we can help you.


Copyright 2014 Richard K. Viall CPCU, CIC