Who is insured on a homeowners policy, and who is not

Under the standard ISO homeowners form (HO 00 03), the people covered are the named insured on your declarations page, a spouse who lives in the same household, relatives who live with you, and people under 21 in your care. A full-time student away at school can still count. Roommates, tenants, an unmarried partner, a spouse who has moved out and a co-owner who is not named on the policy generally do not.

Those lines matter on the day of a claim. Liability coverage follows the person, property coverage follows ownership, and a mistake in who is listed can leave a household member with no protection at all. Your own insurer's form and your state's amendatory endorsements control, so treat this guide as a map of the standard wording and check your policy against it.

Three labels that sound alike

Policy language uses several terms for people, and mixing them up causes most of the confusion.

Named insured. The person or people printed on the declarations page. In the HO 00 03 05 11 form, "you" and "your" mean the named insured and the spouse if a resident of the same household. This is the person who can change or cancel the policy, receives notices, and is paid when the policy pays.

Insured. A broader group defined in the form: you, plus certain other people who live with you or are tied to your household. This is the label that decides who gets liability protection and whose belongings count as covered property.

Additional insured. Someone added by endorsement, usually because they own part of the house or have a legal interest in it but are not otherwise within the definition. An additional insured has coverage rights. An additional interest, such as a mortgage lender, does not; the lender is protected under the mortgage clause, which is a separate matter.

Who counts as an insured under the HO-3

The 2011 ISO form defines "insured" as you and residents of your household who are either:

• your relatives, at any age, or
• other persons under age 21 who are in your care or in the care of a resident relative of yours.

The form does not define "relative", and insurers and courts generally read it to mean people related by blood, marriage or adoption. That brings in adult children who still live at home, a parent or in-law who moves in, and a spouse's relatives, because "you" includes the resident spouse. A foster child or a ward who is under 21 and in your care generally qualifies too, even without a blood relation. Whether a partner's child or a grandchild you are raising qualifies is a question of who is actually caring for them, and insurers differ on borderline cases.

"Resident of your household" is a factual test, not a mailing-address test. An adult son who rents his own apartment is not a resident. A daughter who sleeps at your house during a long hospital stay may be.

Students away at school

The form adds a separate rule for students. A full-time student, as the school defines it, who lived in your household before leaving for school stays an insured if they are:

• under 24 and your relative, or
• under 21 and in your care or the care of a resident relative.

So a 22-year-old child in a dorm or off-campus apartment is still an insured, and a 25-year-old graduate student is not. Their belongings are also covered under your personal property coverage, with two catches in the same form: property usually kept at another residence of an insured is limited to the greater of 10% of your Coverage C limit or $1,000, and theft of a student's property at the school residence is covered if the student was there at any time in the 90 days before the loss. The details are in does homeowners insurance cover a college student's belongings?.

After a death

The form has a clause for this. If the named insured, or a resident spouse, dies, the policy insures the legal representative of the estate for the premises and property the deceased owned at the time of death. Household members who were insureds stay covered while they live at the residence premises. That bridges the gap while an estate is opened, but it is temporary, and the policy should be rewritten promptly; see insuring an inherited house: what to do in the first 30 days.

Who is not an insured

People who often assume they are covered, and are not:

• Unrelated roommates and tenants. They are not relatives, and the form excludes their belongings from Coverage C unless they are related to an insured. They need their own renters policy; see HO-4 renters insurance explained: coverage, limits and common gaps.
• An unmarried partner. A partner is not a "spouse" or a "relative" under the standard wording. Some insurers write domestic partners into their forms or add them by endorsement, and some states have rules on the point. Without that, the partner is covered only if named on the policy. See unmarried couples and co-owners on one policy.
• A spouse who has moved out. The form covers a spouse only "if a resident of the same household." After a separation, the departing spouse can lose insured status even while still on the deed. See divorce and the homeowners policy.
• A co-owner who is not named. Owning the house and being insured on the policy are different things. Siblings who inherit together, or a parent on the title only, may have no coverage unless listed.
• Guests, babysitters and contractors. They are not insureds. Your liability coverage may respond if they are injured and you are legally responsible, but they are not covered by the policy themselves.

The form does have one courtesy for guests and others. At your request, it will cover personal property owned by others while it is on the part of the residence premises occupied by an insured, and the property of a guest or residence employee in any residence an insured occupies. That is a limited way to protect their belongings, not a grant of insured status.

Why the line matters on a claim

Insured status changes outcomes in four places.

1. Liability. Coverage E (personal liability) and Coverage F (medical payments to others) respond to what an insured does. Coverage E excludes bodily injury to you or another insured, and Coverage F excludes injury to anyone, other than a residence employee, who regularly lives at the insured location. A resident relative hurt in the house therefore cannot collect from your liability coverage. The form also says the insurance applies separately to each insured, without multiplying the limit.
2. Property. Coverage C pays for property owned or used by an insured. A roommate's laptop stolen from the shared living room is not covered; a resident child's laptop is.
3. Payment. The form says losses are adjusted with "you" and paid to "you" unless another person is named in the policy or is legally entitled to receive payment. A co-owner who is not on the policy may find the check made out to someone else, and the form limits what it pays any one insured to that person's interest in the property at the time of loss.
4. Fraud and intentional loss. The ISO form says that if an insured intentionally causes a loss, no insured is entitled to coverage, and that coverage is void for all insureds if any insured conceals or misrepresents a material fact or commits fraud relating to the insurance. Courts and legislatures in a number of states soften this for an innocent co-insured, and many insurers' state endorsements do too. If you share a policy with someone you are separating from, ask what your state's version says.

Hypothetical household

Say Maria is the named insured on a policy for the house she and her husband Dan own. Here is how the standard wording would treat the people connected to the house:

Priya's situation shows the usual trap. She has an insurable interest in the property, but the policy owes her only what it owes someone named on it. If the house burned, Priya would have no rights under the policy. The claim would be adjusted with Maria and Dan, and any settling up with Priya would be a family matter.

Fixing gaps in four steps

1. Read the declarations page and compare the named insureds to the names on the deed, trust or LLC documents. Spelling and legal names matter.
2. Write a list of everyone who sleeps in the house most nights, with their relationship to you, and add anyone who might fall outside the definitions: an unmarried partner, a nonrelative adult, a grandchild you are raising.
3. Ask your agent in writing whether each person is an insured under your form, and what it would cost to add them as a named insured or by endorsement. Ask about a trust or LLC owner specifically; those often need an additional insured endorsement.
4. Tell your insurer after a marriage, divorce, death or new adult moving in, and run your answers through the homeowners coverage gap checker if you want a second look.

Key takeaways

• The standard HO-3 treats as insured the named insured, a resident spouse, resident relatives, people under 21 in your care, and certain full-time students away at school.
• Roommates, tenants, unmarried partners, a spouse who has moved out and unnamed co-owners are generally not insureds, even if they live in or own part of the house.
• Insured status decides who gets liability protection, whose belongings are covered and who is paid on a claim.
• Your insurer's own form and your state's endorsements can widen or narrow these definitions, so ask for the answer for your policy in writing.
• Update the policy after marriage, divorce, a death or a new household member, and name every owner who needs protection.