What Is a Policyholder?

A policyholder is the owner of a car insurance policy. Also called the “named insured,” the policyholder is the only person who can make changes to the policy, like increasing coverage, updating personal information, or adding additional drivers.^[1]

The policyholder is typically the vehicle owner, but that’s not always true. For example, a college student with their own insurance policy might be the policyholder, even if their parents own the car. If you’re unsure who the policyholder is on your vehicle’s insurance, check the declaration page. It’s the first page of your policy documents and lists the policyholder’s name.

Here’s what you need to know about insurance policyholders, including how they can affect car insurance rates.

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How the policyholder can affect rates

Insurance companies generally base rates on the policyholder. Insurers consider many factors, like the policyholder’s driving record, age and gender, credit history, and location. Even if other drivers use the car, the policyholder’s personal information generally has the biggest influence on cost.^[2]

For instance, older policyholders with more experience behind the wheel typically pay less for coverage than young drivers. This is why it’s generally cheaper to add a young driver to a parent’s policy instead of getting their own. Plus, policyholders with an at-fault accident or other violation usually pay more than policyholders with a clean record.

Here’s how much drivers pay monthly for a liability-only policy based on the policyholder’s personal information and driving record.

Policyholders vs. listed drivers

Policyholders can add listed drivers to their insurance policy. Listed drivers are usually household members, like children, a spouse, a partner, a parent, or a sibling. Sometimes, people who use your car but don’t live with you, like caregivers, might also be listed. Your insurance policy provides coverage for all listed drivers and generally for people who have your permission to drive the vehicle.

The policyholder has the most significant effect on rates, but the listed drivers also influence the costs. For example, your insurance premium might increase after your daughter causes an accident or if your spouse has a history of speeding tickets.

Who’s covered in an accident

An auto insurance policy covers listed drivers the same way it covers the policyholder. For example, let’s say you’re the policyholder, and your daughter, who’s on your policy, causes an accident. Because she’s a listed driver, your policy covers the cost of the other party’s repairs and medical treatment, up to the policy’s limits.

The state you’re in also affects how coverage works. At-fault states require the driver who causes the accident to cover the cost of repairs. No-fault states require both drivers to file an insurance claim for bodily injuries. But the at-fault driver is still responsible for the property damage.^[3]

Your policy might also cover drivers you don’t add, but it depends on the situation. Car insurance usually covers the car and not the driver, which means that people who drive your car have coverage as long as you give them permission to use the vehicle. For example, if you let a friend borrow your car or a partner drive the vehicle, your insurance covers them.

Car insurance requirements for policyholders

Car insurance is a legal requirement in every state except New Hampshire — meaning policyholders must have the state’s minimum liability coverage. Liability-only coverage helps pay for repairs and medical treatment for the other driver when you cause an accident. But it doesn’t cover your repairs or treatment.

For additional protection, insurance professionals recommend a full-coverage policy, which helps pay for your vehicle repairs. It includes liability, comprehensive, and collision coverage. You can also opt for other add-ons that help pay for medical costs or provide coverage for uninsured or underinsured drivers.^[4]

Here’s how additional coverage works and why you might consider them:

• 

  Comprehensive coverage

  Comprehensive insurance protects against theft and non-collision damage from things like vandalism, hail, fire, and natural disasters.

• 

  Collision coverage

  Collision insurance helps pay for your vehicle’s repairs when you cause an accident or hit another object, such as a building, pole, or other property.

• 

  Uninsured/underinsured motorist coverage

  Uninsured/underinsured motorist coverage pays for your repairs and medical expenses if an uninsured or underinsured driver causes an accident or you’re the victim of a hit-and-run.

• 

  Medical payments (MedPay) coverage

  Medical payments coverage helps pay for medical care if you or your passengers are injured in an accident. You can use MedPay coverage regardless of who’s at fault.

• 

  Personal injury protection (PIP) coverage

  PIP coverage helps pay for medical care and lost wages if you or your passengers are hurt in an accident. States with no-fault laws require drivers to purchase PIP.

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Can you change a policyholder?

You can’t change the policyholder after coverage starts. Instead, you’ll need to contact your insurer to cancel the policy and create a new one under a different policyholder’s name.

You might need to change the policyholder if you sell your car or the current policyholder passes away. An update to the policyholder may also be necessary when you give a car to a child or other family member.

To make the change, contact your insurance company and explain the situation. Typically, your insurer will start a new policy and cancel the old coverage.

Insurance policyholder FAQs