My Insurance Policy

My Insurance Policy - Who is the Policyholder/Insured?

The last post here at My Insurance Policy defined what an insurer was, and provided a rating chart that gave you a good idea of financial stability and operating quality of an insurance company. Today, we’re getting a little more personal - and talking about YOU. Well, maybe not you specifically, but the policyholder and insured of an insurance policy.

Please note that although most commonly the policyholder is included as an insured (and actually, most referenced definitions indicated these terms are one in the same), it is the opinion of this writer that it does not stand that these two terms are interchangeable.

You might recall our first post that defined policyholder as the responsible party (whether an individual or group) for the policy, and this is the person who makes the contractual agreement with the insurer. The insured, on the other hand, is the persons or property that is actually covered under the policy.

As an insurance agent, I have observed instances (specifically automobile policies) where you might have a parent as the owner of the policy (policyholder) and a child as the sole listed driver (insured). This is where I make the distinction - although the legal jargon of insurance might disagree - and I believe it simplifies certain questions when concerning what or who is ‘covered’ on insurance policies.

Here’s my ‘layman’s terms’ explanation for each of these two terms:

The policyholder, as mentioned earlier, is the party (individual or group) that is responsible for the insurance policy. They agree, sign, and are to abide by the stipulations set out in the policy contract. If damages occur and a claim is filed, claims payment goes to the policyholder. If a policy cancels and there are charges remaining, the policyholder is liable for those charges left against the policy.

The insured is the person or property covered, which may include the policyholder also. The insured(s) might include a spouse or additional driver listed on the policy, the home or dwelling listed, or the employee covered under his work’s group health plan.

As a reminder, these references are for simplicity – they are not necessarily a legal representation of the terms and definitions official used by insurance companies or insurance regulations.

Until next time…

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