Are you wondering who is the policyholder of the insurance? Then, you have come to the right place. When we say policyholder, it is the person who acquired the insurance policy and held the authority to exercise the rights stated in the insurance contract. Most often than not, the policyholder is the one insured or one of the beneficiaries of a certain insurance policy.
In simpler terms, the name of the persons indicated in the documents filed in the insurance company’s records is the policyholders.
Understanding this and how insurance work is important when you are looking for an insurance policy to purchase. Every insurance policy includes three components including premium, policy limit, and deductible. Read further to find out more about insurance and its policyholder.
Policyholder Defined
In terms of insurance, a policyholder is a person owning an insurance policy. If you are a policyholder, then it means that you purchased the policy. It also means that you may arrange adjustments. The policyholders are the ones responsible for ensuring that people will pay the premiums.
For homeowner insurance, the homeowner is the policyholder. With regards to renter insurance, the renter is the policyholder. But for a car insurance policy, there are several ways to be a policyholder.
It would help if you did not immediately assume that the car owner is an auto insurance policyholder. That is because you may acquire this particular insurance even if you do not own a car. We will discuss more on this in the next section.
Policyholder Of An Auto Insurance
If you buy auto insurance, the insurance provider will ask you to differentiate the people included in the policy. This is an important consideration before the purchase.
In essence, a particular person will be distinguished as the policyholder while others are the listed drivers. For policyholders, they need to have a full understanding of their responsibilities since they are the ones that will be accountable for the premium of the insurance policy.
You should know who can be the policyholder as it can affect many aspects, including the amount to be paid. This will also allow you to adjust the policy according to your ability to pay.
So when we talk about car insurance, the one who bought the insurance policy is the policyholder. But it does not mean that the coverage is only applicable to you. You are allowed to extend the policy so that it will also cover other people.
Typically, you can get your relatives living with you covered as well as the other vehicle owners. As mentioned earlier, the other persons covered with your auto insurance policy but not the policyholders are the listed drivers.
Types Of Coverage Needed By A Car Policyholder
After you learn who is the policyholder of the insurance, as the policyholder, you have to make sure that the policy involves the protections that you need. For example, if you are searching for an insurance policy, you may want it to include specific types of coverage.
#1. Liability coverage
Many states are requiring this type of auto insurance. Both property damage and bodily injury liability coverage is most likely needed to drive the car legally in those states. The bodily injury liability will help in your medical expenses if you have hurt someone during an accident. Here are the automobile financial responsibility laws by state.
Correspondingly, the property damage liability is helpful in whatever property damage occurred during an at-fault accident. For instance, you can use this to pay for repairs of another car or your neighbor’s garage after you accidentally back into it.
#2. Comprehensive coverage
This coverage is optional, but you may want to include this in your policy as well. Remember that the car isn’t only at risk as you are driving. If a large branch of tree falls or a thief has stolen it overnight, the comprehensive coverage will be helpful for the resulting expenses. This will be up to the limits of your policy.
#3. PIP
Various states also require PIP. This is considered as the no-fault coverage. In case of an accident, whether or not you are at fault, the policy will cover the medical expenses of the injuries you and your passengers sustained.
This will also help cover the lost wages if one of the injured persons – you or your passenger cannot report to work for the time being due to the said accident. You might want to read about the average cost of car insurance for 2021.
#4. Collision coverage
If you notice after an accident that you have caused, the liability coverage will only help cover the injuries of the other party involved. With that being said, it is advisable to get collision coverage as well – though it is optional.
This will help in replacing or repairing your vehicle. But this is only to the extent of your car insurance policy limits. So it is recommended to purchase sufficient collision coverage that can replace your vehicle when totaled.
Regardless, as mentioned above, car insurance policyholders are not limited to those who own a car because those who drive occasionally but do not have a car registered under their name can still avail of non-owner car insurance.
It’s A Wrap!
The simplest answer to the question: who is the policyholder of the insurance is the person owning and managing the policy. It means that the policyholder may adjust the coverage and is responsible for the premium payments. In contrast, if you still have time for more articles, this one about the definition of carport vs garage might interest you.