A policyholder is the one who has bought an insurance policy. The policy may be a term plan, health insurance, or car insurance.
Who is the policyholder in auto insurance?
While buying auto insurance, you need to differentiate between a policy holder and the listed drivers for your auto operations.
Policyholders should understand their responsibilities as they are liable to pay the premium.
You must understand the terminology around policyholder as it affects the premium amount and also your ability for adjustment of your auto insurance policy.
When you buy a policy on your name, you are the policyholder and also you need to pay the defined premiums to keep the auto insurance policy active.
Policyholders are obvious in cases of home, health, life, etc. However, it is not the case with auto insurance. Here you can have auto insurance without owning a vehicle.
Most importantly if you have bought the car insurance, you are not necessarily the covered person. You can extend your auto insurance to multiple car owners and to your relatives also. In auto insurance, most of the people covered are the listed drivers.
Here the specific thing is that drivers who are not actually eligible to have an insurance policy are also covered. Also, the listed drivers are not authorized to make changes in the policy. Only the policyholder is reserved for all these changes.
What types of coverages are included in Auto insurance for the policyholder?
When you are buying auto insurance, you need to ensure that the policy offers all the protection you may need. Please keep the below points in mind while buying the best car insurance.
- Coverage Type – comprehensively understand what all is covered in your car insurance.
- PIP () Personal Injury Protection) – In case if you need this, it helps in paying for the medical costs if you or any passengers get hurt in any mishappening/accident.
- Comprehensive – Things like theft, vandalism or falling objects are included in this type of coverage.
- Collision – You get financial coverage for repairs and replacement for your vehicle in case of an accident.
Can you change the policyholder?
As there are liabilities attached to the policyholder, you may want to change the policyholder at some point in time. In the below cases, generally, policyholders are changed.
- In the case of short term transfer of insurance
- In case of transfer of ownership
- in case of death of the policyholder
All the listed drivers are protected under the policy. However, they are not policyholders. The policyholder is the one who owns and manages the entire policy and its related adjustments.