Class 2 Insurance

What is 'Class 2 Insurance'

Insurance that covers individuals that are not specifically named in an auto insurance policy. Class 2 insurance, also written as Class II insurance, provides a narrower range of coverage compared to that afforded to Class 1 insured individuals. This type of insurance coverage applies to uninsured motorists.

BREAKING DOWN 'Class 2 Insurance'

Class 2 insurance coverage applies to individuals who do not fall under the Class 1 coverage restrictions, meaning that Class 2 insurance applies to an individual who is not the policy owner, is not the spouse of the policy owner, or is not a resident relative of the policy owner. For example, a Class 2 insured individual could be a friend of the policy owner. The coverage applies as long as the Class 2 individual is traveling in a vehicle identified in the insurance policy.

While a Class 1 individual is covered if s/he, as a pedestrian, is injured by a vehicle, a Class 2 individual is not covered in this way because s/he only receives coverage while occupying a vehicle.

Even though the Class 2 insured individual is not the policy owner or the relative of the policy owner, he or she is still covered under the insurance contract as long as he or she is lawfully occupying the vehicle. Auto insurance policies provide coverage to the named policy owner and other Class 1 individuals, as well as passengers in the vehicle that are not related. Any uninsured motorist coverage thus applies to Class 2 individuals.

In insurance coverage, “stacking” uninsured motorist coverage means that the coverage of two or more insured vehicles can be added together to increase the limit of uninsured motorist coverage. Because Class 2 insured individuals are not named in the policy and do not pay premiums, they also are not permitted to stack underinsured coverage on policies that they are not insured under.