What Does Policyholder Mean in Car Insurance?

A policyholder is the purchaser and owner of an insurance policy.

Taylor Medine
Written byTaylor Medine
Taylor Medine
Taylor Medine
  • 8+ years writing personal finance content

  • Published in Business Insider and The Balance

Taylor got her start demystifying complicated financial topics on a personal blog. She’s since covered everything from budgeting to debt management for major outlets.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated February 9, 2023 | Reading time: 4 minutes

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Whether you’re getting car insurance for the first time or renewing coverage, brushing up on car insurance lingo can help you understand the terminology as you shop around. Here’s what a policyholder means in car insurance, including who they are and what they’re responsible for.

Who is the policyholder on a car insurance policy?

By definition, a policyholder is a purchaser and owner of an insurance policy. As the owner of a car insurance policy, policyholders are responsible for making premium payments and can make updates to the policy, such as changing coverage limits or adding drivers.[1]

You can figure out who the policyholder is for a car insurance policy by checking the insurance declaration page. In a large stack of policy documents, the declaration page is the one right on top that has your address and outlines the policy period, policy number, your coverage, the insurance limits, and all the insured drivers.

“Named insured” is another phrase that might be used to refer to the policyholder on insurance paperwork.

What’s the difference between a policyholder and a listed driver?

Think of policyholders as policy administrators: they manage the insurance and keep it active by paying the bill. Meanwhile, listed drivers are covered by the insurance policy but aren’t the main contact for billing inquiries and other insurance matters.

If you purchase car insurance, you would be the policyholder. If there are other drivers in your home, such as a partner, spouse, or teen, you can add their names as listed drivers. However, it’s not necessary to add every friend or relative who might drive your car to your policy.

Car insurance generally protects your car when temporary drivers are behind the wheel. So, if you give a relative visiting from out of town permission to drive your car and they get into an accident, your insurance would generally cover that accident. But it’s still important to read the terms of your insurance policy to find out coverage limitations before handing over the keys.

Can Car Insurance and Vehicle Registration Be Under Different Names?

Can Car Insurance and Vehicle Registration Be Under Different Names?

Can a policyholder be changed after you purchase a policy?

Policyholders on insurance can’t be changed as easily as deleting a listed driver or adjusting coverage. If you split up with a partner and are a listed driver on their insurance, you’d have to apply for your own policy. Similarly, if a child moves out and needs their own insurance policy, they have to apply for a policy on their own.

To shop around for a new policy, compare rate quotes and look for discounts that you might qualify for. For example, discounts for safe driving, being a student, paying premiums in full, and bundling several types of insurance together could help reduce your premiums.

Bundle Home and Auto Insurance: Save with Discounts

Bundle Home and Auto Insurance: Save with Discounts

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What car insurance coverage do policyholders need?

In most states, you’re required to have at least liability coverage for your car, which covers property damage and bodily injury you cause to others in an at-fault accident.[1]

Texas, for example, requires $30,000 in bodily injury coverage per person, up to a total of $60,000 in bodily injury coverage per accident, and $25,000 for property damage coverage.[2] However, choosing coverage that meets just the minimum requirements for your state may not be enough to pay for injuries and damage if you’re in a major collision.

Increasing your liability coverage or purchasing additional coverage, like comprehensive and collision, could provide further protection for you, your passengers, and your ride. Below are other coverage options to consider:

  • illustration card https://a.storyblok.com/f/162273/x/665da91bf7/comprehensive-coverage.svg

    Comprehensive

    Comprehensive insurance provides coverage for car repairs if an event other than a car collision causes damage to your car, like a fire, flood, or vandalism.

  • illustration card https://a.storyblok.com/f/162273/x/169fdfde11/liability-coverage.svg

    Collision

    Collision provides coverage for car repairs if you get into an accident with another car or object.

  • illustration card https://a.storyblok.com/f/162273/x/e30eeeebc5/personal-injury-protection.svg

    Personal injury protection (PIP)

    Personal injury protection (PIP) pays for medical bills and lost wages for you and passengers in your car if you’re in an accident.

  • illustration card https://a.storyblok.com/f/162273/x/5285c4cd74/uninsured-or-underinsured-motorist-coverage.svg

    Uninsured and underinsured motorist coverage (UM/UIM)

    Uninsured and underinsured motorist coverage (UM/UIM) protects your car if you’re in an accident with someone who doesn’t have car insurance or has insufficient coverage. In some states, uninsured motorist coverage is required.

  • illustration card https://a.storyblok.com/f/162273/x/4c9753bdbe/medical-payments.svg

    Medical payments

    Medical payments coverage helps pay medical bills for you and your passengers if you get into an accident.

Policyholder FAQs

Here are some answers to commonly asked questions about car insurance policyholders.

  • Is a policyholder the same as a policy owner?

    Yes, a policyholder is the policy owner who purchases insurance. The policy owner can make policy adjustments and is responsible for paying insurance premiums. Policyholders can also add other listed drivers for the insurance policy to cover.

  • Who gets the insurance check if the car owner is different from a policyholder?

    It depends on what the insurance check is for. If the check is a refund for insurance overpayment, it could go directly to the policyholder who pays the bill. If the check is for a claim and the car is owned outright, the check might go directly to the insured person.

    However, if there’s a lien against the car, the check might get written out to both the lienholder and the insured person since both parties have a financial interest in the car. In this case, contact your lender to figure out how to proceed with cashing the check.

  • Does it matter who is the policyholder on car insurance?

    Yes, it matters who the policyholder on car insurance is. The policyholder is tasked with choosing the appropriate coverage to insure drivers and is responsible for making the payments to keep insurance active. The policyholder must also keep up with policy changes, which is a crucial task to remember whenever you buy or sell a car or need to adjust coverage for another reason.

  • Is the insurer the policyholder?

    An insurer is the company that provides insurance and isn’t the same as the policyholder. The policyholder is the person who purchases insurance and is typically also the person whom the policy insures, along with other listed drivers.[3]

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Sources

  1. III. "Auto Insurance Basics."
  2. Texas Department of Insurance. "Automobile insurance guide."
  3. III. "Insurance 101."
Taylor Medine
Taylor Medine

Taylor Medine is a writer who's covered personal financial topics from budgeting and saving to paying down debt for more than eight years. She got her start demystifying intimidating money topics for the everyday consumer on a personal blog, and has since been published on Bankrate, Experian, Forbes Advisor, The Balance, Business Insider, Credit Karma, and more. Follow her on Twitter @taytalksmoney.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

media logomedia logo

Compare Car Insurance Quotes Instantly

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

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