Additional insured and additional interest means the same thing when they are discussed when it comes to car insurance. There may be subtle differences in their meaning; automobile insurance companies tend to interchange the terms.

“Additional insured” and “additional interest” are listed together in the car insurance terms glossary. A lien holder may be an additional interest or an additional insured. defines “additional insured” or “additional interest” as a person or an organization other than the named insured protected under the named insured’s auto policy. Additional insured means a person or company/organization (other than the named insured) covered under the policy’s terms.

For example, if a vehicle is leased, the leasing company will be listed as an “additional insured,” as well as a lien holder or loss payee, on your car insurance policy. This protects the leasing company if it is named in a lawsuit for an accident caused by a policyholder.

Financing companies qualify as additional interest

If you have a loan on your car, then your financing company can require you to have them listed on your auto insurance policy as the lienholder and as an additional interest since they have an interest in your vehicle and the coverages on it.

A lienholder will require specific insurance coverages, typically state liability coverages plus full coverage, which includes comprehensive and collision coverage on your vehicle.

Any lienholder, additional interest, or loss payee listed on your policy will receive notification of auto insurance. A copy of the declaration and/or any policy status forms are mailed to them. So, if you change your coverages, cancel them so the car is uninsured, or lower your coverage from full coverage to liability only, your lienholder will be informed.

If a lien holder finds that the insurance they mandate is not on their asset, the car, and how they require it, the financial paperwork likely states that they can place “forced” insurance on the vehicle.

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Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.