Knowing the technical terms used in an insurance contract can be daunting if you aren’t an agent yourself. For instance, what is the difference between a policyholder and a listed driver? This question is an important one when it comes to understanding how your car insurance contract works.

Compare rates and save on auto insurance today!

Close X
Advertising Disclosure
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Compare auto insurance rates

Answer a few questions to see personalized rates from top carriers.
Caret DownCaret Up
Please select age
Location-Icon Created with Sketch.

Save on auto insurance with quotes from trusted providers like:

Progressive

Drivers switch & save an average of $750+/year

Liberty Mutual

Are you overpaying for auto insurance?

Allstate

Safe drivers choose Allstate®

Powered by Coverage.com (NPN: 19966249)
Insurance Disclosure

Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

See more providers in
Choose from insurers in

Policyholders can affect how much the car insurance costs, who can make policy changes and when those changes occur. Bankrate has broken down exactly what a policyholder is so that you can better understand your role as it applies to your insurance contract.

What is a policyholder?

A policyholder (or policy holder) is the person who owns the insurance policy. In most cases, the policyholder is the only person who can change the policy. The policyholder is also the person that is responsible for making sure premium payments are up-to-date. Along with the policyholder, your contract may also list additional drivers. An additional driver is anyone other than the policyholder who is covered to drive.

Usually, the policyholder of an auto insurance policy is the owner of the vehicle, but not always. For example, some companies require the primary driver to be the policyholder, regardless if they own the car. You can also be a policyholder if you do not own a vehicle.

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

Policyholders buy and manage the insurance policy, including adjusting coverage as needed. Most auto insurance policies allow for multiple policyholders so that spouses and partners can hold the policy together.

But other drivers can be protected even if they do not meet the policyholder definition. These are called listed drivers. A teenager who recently received their license is probably a listed driver and not a policyholder, for example. If that teen called the insurance provider and tried to change their auto insurance coverage, they would likely be unable to do so. That right is generally reserved for the policyholder.

How to determine what types of coverage you need as a policyholder

As a policyholder, you are responsible for making sure your policy offers the protections you need. As you shop for the best car insurance policy, there are specific coverage types you may want to include, namely:

Coverage type What it protects
Liability This coverage steps in if you or a listed driver on your policy causes injury or damage to another party behind the wheel.
Personal Injury Protection (PIP) This coverage helps pay for medical costs if you or any of your passengers get hurt in an accident. PIP applies no matter who is at fault in the accident.
Comprehensive This coverage steps in for non-driving incidents such as theft, vandalism or falling objects. Comprehensive also provides coverage if you hit an animal.
Collision This coverage helps pay to repair or replace your vehicle after an accident.

Let’s look more closely at these options:

Liability coverage

Most states require this type of car insurance. You will most likely need both bodily injury and property damage liability coverage to legally drive in your state.

Bodily injury liability helps with medical expenses if you hurt someone in an accident. Similarly, property damage liability helps with the others’ property damaged in an at-fault accident. That means it can help pay for repairs for another driver’s car, or even to repair your neighbor’s garage after accidentally backing into it, for example.

PIP

Some states require PIP, which is considered no-fault coverage. Regardless of whether you are at-fault for an accident, it can cover medical expenses for injuries sustained by you or passengers of your vehicle. PIP can also help with lost wages if you or one of your injured passengers is unable to work for a period of time following the accident.

Comprehensive coverage

If you own your vehicle outright, comprehensive is optional. However, you may want to consider adding it if you don’t currently carry it on your policy.  After all, your car is not only at risk when you are in drive. If a large tree limb falls on it overnight or someone steals it, your comprehensive coverage will help with the resulting expenses up to your vehicle’s value minus your deductible.

Collision coverage

You might have noticed that liability coverage only pays claims to the other parties involved if you are at fault in an accident. If you want coverage for your vehicle, you will need to add collision. Collision coverage pays to repair or replace your car if you are in an accident. As with comprehensive, collision is optional if you aren’t financing or leasing, and a deductible usually applies.

Other coverages

This is by no means a comprehensive list of available auto insurance coverages. For additional protection on and off the road, you might want to add other types of coverage, like roadside assistance, uninsured motorist or gap insurance.

Can a policyholder be changed after you purchase a policy?

Technically, no — you cannot change who the policyholder is after you purchase a policy. There are times, however, when you may need your policy to reflect a different person as the policyholder. In this case, your insurance company will cancel your current policy and rewrite it in the new policyholder’s name. Some examples of when this could happen include:

  • Selling your vehicle: When you no longer need to insure a car because you have sold it, you can contact your insurance company for the steps necessary to cancel your policy. Your vehicle’s buyer will then be responsible for buying insurance in their name. Some states require you to cancel your registration before canceling the policy. Otherwise, you risk incurring fines for a lapse of insurance.
  • Death of a policyholder: If the policyholder dies, their insurance needs to be canceled and rewritten for the vehicle’s new owner. Do note that some insurance companies will require a death certificate or executor of estate paperwork to make changes to the policy.

Frequently asked questions