Terms of a Policy: Knowing Who is Insured

I have written before on how Tennessee Courts interpret an insurance contract, stating that Tennessee courts have long agreed that “insurance policies are, at their core, contracts.”¹ Usually one of the first questions asked regarding an insurance policy is what is covered under this contract? Is the fence covered under other structures? Is this computer personal or business property? The ‘what’ is very significant. But asking who is covered under these insurance contracts can be equally significant.

When asking who, the simplest answer is ‘the insured.’ But determining who is the insured is not always the straight answer one may wish. ‘Insured’ under an insurance policy merely indicates a defined term within the insurance contract. From policy to policy, this defined term can change. The declarations page may list the policyholders name, but many times the specific definition of “you” and “your” in the policy is determinative in who the contract actually applies.

For example, a young man purchases a home and the corresponding property insurance. Six months later, he finds the love of his life and marries her at Harlinsdale Farm in Franklin, Tennessee. Do the terms of the policy apply to the new bride? This is determined by the definition of “you” and “your.” If he has a policy with the following language, then yes:

Throughout this policy, “you” and “your” mean the “named insured” shown in the Declarations and, if a resident of the same household as you: (a) your spouse; (b) your civil union partner; or (c) your domestic partner.²

As stated above, being the “named insured” does not always limit the contracts application to only the groom who purchased the policy and who is listed. In fact, the bride’s name may never appear on the policy; however, she is still responsible for all the terms of that policy, including all the duties after loss.

Other policies may use an even broader definition, such as “[t]hroughout this policy, the words, you and your, refer to the name insured shown in the declarations and any other person or organization qualifying as a named insured under this policy.”³ This broader definition applies to more situations beyond the specified ‘spouse,’ ‘civil union partner,’ or ‘domestic partner.’ This broader definition can extend to a relative living in the household or parties to an ownership trust or association.

Determining who is covered under an insurance policy has many implications. As noted above, the Bride, Trustee, or Corporate Representative would now also be responsible for the duties after a loss, such as appearance for an examination under oath. However, these new individuals also gain the rights under the policy, importantly, liability and personal property coverage.

Being an unnamed party to an insurance contract does not in itself create additional hardships as the unnamed party also benefit from that same contract. However, a party must first know whether they are one of these unnamed parties, whether they are the ‘who’ that is covered.
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¹ Jamie Glass, Tennessee Court Interpretation of Insurance Contracts, Property Ins. Blog (Dec. 30, 2020), quoting Allstate Ins. Co. v. Tarrant, 363 S.W.3d 508, 527 (Tenn. 2012) (Koch, J., dissenting).
² Farmers Smart Plan Home Policy Tennessee, Form 56-5650, p. 4
³ Patrick Wraight, You Can’t Read Insurance Policies Like Anything Else, INS. ACADEMY, https://www.ijacademy.com/members/courses/637/view/1