A policyholder holds the insurance contract, checks the policy details and must take reasonable care when answering the insurer’s questions.
A policyholder is the person or organisation that enters into an insurance contract with an insurer. The FCA explains that policyholders have rights under an insurance contract.
The policyholder’s name should appear on the insurance schedule, along with key details about the cover. The ABI describes a policy schedule as a document that shows the policyholder’s details and the type of cover provided.
The policyholder is one party to the insurance policy. The insurer is the other party. An insurance broker may help arrange the policy, but the broker does not usually underwrite the cover.
Not always. A policy can cover other people, depending on its terms.
For example, a motor policy may include a named driver. However, the named driver is not automatically the policyholder. The main driver is the person who uses the vehicle most.
These roles must be recorded correctly. The ABI warns that giving false information about the main driver can be treated as fronting and may amount to insurance fraud.
The policyholder may also be different from the vehicle’s registered keeper. Whether an insurer accepts this arrangement will depend on its underwriting rules and the full details provided.
A policyholder should answer the insurer’s questions carefully when buying, renewing or changing cover.
Under the Consumer Insurance (Disclosure and Representations) Act 2012, consumers must take reasonable care not to make a misrepresentation. This means the information given should be complete and accurate to the best of their knowledge.
The policyholder should check details such as:
Incorrect information could affect the policy or a claim. If the policyholder took reasonable care, the insurer cannot take action under the Act because of the misrepresentation. If they did not take reasonable care, the insurer must establish whether the misrepresentation affected the cover it would have offered. The outcome can then depend on whether it was careless or deliberate or reckless.
The Financial Ombudsman Service explains how insurers should assess misrepresentation, including the questions asked, the answers given and what the insurer would have done with accurate information.
The policyholder should tell the insurer or broker when relevant details change, where required by the policy. This could include a change of address, vehicle use, drivers, occupation or property occupancy. Requirements vary, so the policy documents should always be checked.
The policyholder is usually responsible for managing the policy and reporting an insurance claim. An insurer may also speak to another insured person or an authorised representative.
A claim made by another person covered by the policy can still affect the policyholder. For example, GOV.UK states that a claim involving a learner who is added as a named driver could affect the policyholder’s no-claims discount.
Being the policyholder does not mean every claim will be paid. A claim remains subject to the policy terms, exclusions, excesses and the insurer’s assessment.
The policyholder should read the schedule, policy wording and, for motor insurance, the certificate of insurance.
These documents explain who is covered, what is insured and which limits or conditions apply. Any error should be reported as soon as possible.
We can help explain the information insurers ask for and arrange cover based on the details provided. Acceptance, price and policy terms will depend on the insurer and the individual circumstances.
