Jessica Sautter is a Content Writer for with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

Full Bio →

Written by

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

Full Bio →

Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 27, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Key takeaways...

  • When you buy an auto insurance policy, you’re entering into a contract with an auto insurance company
  • The contract says that the carrier will indemnify you against auto-related loss in exchange for premiums
  • When your insurance policy is in your name, you’re classified as the named insured or the policyholder
  • The policyholder is the individual who has an insurable interest in the car and who is listed on the registration
  • Only the policyholder can make changes and get information on the policy when they call the insurance company

You can’t go to your local market or retail store to pick up an insurance policy when you need it. Auto insurance isn’t a tangible good that’s found on store shelves; it’s a personalized financial contract.

In order to buy an auto policy, you have to provide your personal information and then find a policy that you qualify for based on the underwriting guidelines that have been set.

Since insurance is a contract, you’re not just classified as a customer when you enter into the contract.

While you do fit the definition of a customer, insurance companies also classify their customers as policyholders.

To become a policyholder, compare car insurance quotes now by entering your ZIP code!

What does it mean when you’re a policyholder?


In the broadest sense, a policyholder is an individual, a group of individuals, or an organization who holds an insurance policy through a specific carrier. Some companies will say that the policy is written in the policyholder’s name.

Other carriers classify the policyholder and the named insured or insureds that are found on the declarations page of the policy.

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

The Policyholder Owns the Insurance Policy


All of the insurance documents printed up will have the policyholder’s name on them. These documents include the mailers, the declarations page, the invoices, the auto ID cards, and any other verification papers you receive.

All of the documents are in the policyholder’s name because it’s the policyholder who entered into the contract with the company.

When you shop for insurance, it might not seem like it, but you’re getting quotes to see how much it will cost you to enter into an indemnity contract. An indemnity contract means the company will protect you against financial loss as long as you’re paying your premiums that you’ve agreed to.

Since it’s the policyholder who must apply for the coverage, they are the owner of the policy.

The Policyholder Must Have an Insurable Interest in the Car

The name on the policy has to match the name on the vehicle registration if you want to be sure that you’re complying with state law.

To prevent any issues, the carrier will require that you have an insurable interest in the car to be a policyholder.

Technically, having an insurable interest means that you stand to lose money if something were to happen in a vehicle. In other words, you could lose your assets if you damaged someone else’s property, or you could lose money if your own car is damaged.

When it comes to insuring a car, you must be the registered owner of the car.

Compare Car Insurance Companies

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

The Policyholder is Responsible for Making On-time Payments

The only way to keep your auto insurance policy active is to pay the premiums that are due on time.

In the main insuring agreement, it says that the insurer only agrees to pay for your losses when you pay your premiums. It’s no other person’s duty but the policyholder’s to make the payments agreed upon.

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Policyholders Can File Claims for Benefits


It’s the policyholder who’s buying the policy so they can file a claim for benefits when an accident happens. Not just anyone can file a claim and expect the check to be cut to them, even if that person is a listed driver on the policy.

When you’re getting a payment for first-party benefits like comprehensive, collision, or medical payments, the settlement check will be in the names of the policyholders.

Is the policyholder the same thing as the driver?


The terms “policyholder” and “driver” refer to two different things in the insurance world. The policyholder owns the contract, owns the property insured, and has a duty to pay the premiums. The driver, on the other hand, is someone who is listed to drive on the policy.

The driver can affect the premiums, but they don’t have a say in how the car is covered.

Most of the time, high-risk drivers will have a dramatic effect on your insurance rates when you’re getting preferred rates. Policyholders are almost always drivers, but many rated drivers aren’t policyholders.

Only the Policyholder is Authorized to Make Changes to the Policy

If you’re buying a new car, adding coverage to an existing car, deleting a car, or changing your address, you have to be a policyholder to make changes. If changes need to be made and you aren’t authorized to do so, the policyholder will have to request it.

As you can see, it’s important to understand what the term policyholder means when you’re buying auto insurance.

When you’re shopping around, you should always select sufficient coverage that you can afford to maintain.

Get instant quotes online, provide your personal information, and choose the most reputable insurance carrier!