What is a policyholder for insurance?

“Policyholder” is one of those words you hear all the time in the insurance world. It pops up in documents, on websites, in conversations with agents—but what does it actually mean?

Understanding what it means to be a policyholder isn’t just about learning some industry jargon. It’s about understanding your rights, responsibilities, and the role you play in one of the most important financial agreements you’ll ever make. Whether it’s auto, home, life, or supplemental health insurance, being the policyholder means you’re the one in charge. You own the policy. You control it. And that means you need to know what that entails.

Understanding the policyholder

You might be surprised to learn that the definition of a policyholder is pretty straightforward. According to the Financial Consumer Agency of Canada, “the policyholder is the person who owns the insurance policy.” Basically, they’re the ones who sign the contract, pay the premiums, and have the authority to make decisions about how that policy is used.

Most of the time, the policyholder is also the person being insured. For example, if you buy auto insurance for your personal vehicle, you're both the policyholder and the insured.

But that’s not always the case. A policyholder could be covering someone else, like a parent buying life insurance for a child or an employer providing group health insurance for employees.

Legal responsibilities of a policyholder

Legally, the policyholder carries some serious responsibilities. They're on the hook for:

• Making sure premiums are paid on time

• Updating the insurance company about relevant changes (like a new address or an added driver)

• Ensuring the information in the policy is accurate

• Renewing the current policy before it expires

If the policy lapses or contains incorrect details, that’s ultimately on the policyholder. The rights and responsibilities of a policyholder can vary depending on the type of insurance. In life insurance, for example, the policyholder decides who the beneficiaries are and can update that list at any time. With auto insurance coverage, the policyholder can adjust coverage limits, add vehicles, or include additional drivers.

For example, let’s say you’re the policyholder of a homeowners insurance policy. A tree falls on your house during a storm. You’re the one who files the claim, speaks with the adjuster, and receives the payout. Or maybe you’re the policyholder of a group life insurance plan for your small business. You get to decide how much coverage is offered, who’s eligible, and what happens if an employee leaves.

Can there be more than one policyholder?

Yes, a policy can have more than one policyholder. In fact, this is often the case with home insurance or renters insurance, where both you and your partner may be listed as policyholders. Similarly, business insurance policies often have more than one policyholder if there are multiple business partners.

Remember that anyone listed as a policyholder has the power to make decisions that affect the policy and list the beneficiaries. Further, being a policyholder does not just mean that you are insured by the policy (and in some cases, this isn’t even the case), but it also means that you have contractual responsibilities to your insurance company.

How many people can a policyholder insure?

The number of people a policyholder can insure ultimately depends on the insurance company. Insurance providers have different rules about this and may even have different rules for different types of policies. For example, if you are the policyholder of a home insurance policy, it is likely that every person who lives in your home will be insured, including yourself. In such an instance, your policy might insure three, four, or even five people, depending on how many children you have.

Policyholder vs. other insurance roles

Insurance can sometimes feel like it’s written in a different language, especially when you start seeing terms like “insured,” “beneficiary,” and “named insured” floating around. And sure, they all sound kind of similar, but they’re not the same. If you’re the policyholder, it’s important to know how your role stacks up against the others listed in your policy. Key differences between the two:

Policyholder

The policyholder is the one who buys the policy and has full control over it. They’re the person (or organization) responsible for paying premiums and making decisions, like changing coverage or cancelling the policy.

Insured person

The insured person is the one the policy is actually covering. In many cases, it’s the same person as the policyholder, but not always.

For example, you buy a car insurance policy for your teenager. You are the policyholder, but your teenager is the insured person.

Beneficiary

The beneficiary is the person (or people) who receives the policy’s payout if the insured person passes away. A policyholder can name anyone as a beneficiary.

For example, you buy a life insurance policy for yourself. You’re the policyholder and also the insured person. You name your spouse as the beneficiary. They don’t have control over the policy, but if something happens to you, they’ll receive the payout.

Additional named insured

The additional named insured is someone added to the policy who has some rights or coverage under it, often in auto or property insurance. For instance, a spouse might be listed as an additional named insured on a car insurance policy, so they’re fully covered when driving their spouse's vehicle.

For example, you co-own a home with your sibling and take out a homeowners' policy. You can list your sibling as an additional named insured, which means they’re also protected under the same coverage. Here’s a comparison table to help break it down further:

To learn more about the different insurance roles and what parts they play in a policy, reach out to BrokerLink.

Types of policyholders

Not all policyholders look the same, and we’re not just talking about individuals vs. businesses. Depending on the type of insurance and how the policy is set up, there can be more than one policyholder or different kinds of responsibilities depending on who’s named in the policy:

Individual vs. business policyholders

First, let's talk about individual versus business policyholders. Most people are familiar with individual policyholders: you buy a policy to cover yourself, your car, your home, or your family. In this case, you're responsible for everything:

• Paying premiums

• Updating personal information

• Managing claims

• Deciding who gets coverage

However, businesses can be policyholders, too. A business policyholder might be (but not limited to):

• A small business owner insuring a fleet of vehicles

• A company buying group health insurance for employees

• A condo association carrying a master homeowners policy

In these cases, the business or organization is the official policyholder, even though coverage might extend to many people. The main difference is that business policyholders usually have a legal or administrative team handling policy decisions, and they may have more regulatory hoops to jump through when it comes to compliance, reporting, and managing risk.

Primary vs. secondary policyholders

Now, let's talk about primary versus secondary policyholders. Some policies allow for multiple policyholders, typically labelled primary and secondary. This often shows up in joint life insurance policies or shared auto or homeowners policies.

The primary policyholder is the main person listed on the policy. They’re the one who has the final say in making decisions about coverage, filing claims, and making changes to the policy.

The secondary policyholder (sometimes called a co-policyholder or joint policyholder) shares some responsibilities and may be covered under the policy, but their authority is limited unless otherwise specified.

For example, a married couple on a joint auto insurance policy might both be named, but only the primary policyholder can authorize major changes like switching coverage levels or cancelling the policy altogether.

What are a policyholder's rights and protections?

As a policyholder in Canada, you're not just the person who buys and manages the policy; you’re also protected under Canadian insurance laws. That means you have the authority to make changes to your coverage and the right to fair treatment from your insurance provider. What you should know about your policyholder rights:

Your right to make changes or cancel

You have the right to cancel your policy at any time. If you decide you no longer need the coverage or you've found a better option with another provider, you’re free to end the policy. Just be aware that some policies may charge a cancellation fee or refund your unused insurance premium on a prorated basis.

You also have the right to modify your policy. That includes adjusting coverage limits, changing deductibles, adding or removing vehicles, or updating beneficiaries, depending on the type of insurance you hold.

In some cases, policies may also allow for a change in ownership (commonly in life or business insurance), although this often requires approval from the insurance company and proper documentation.

You're protected against unfair cancellations

Insurance companies in Canada can't just cancel your policy without a valid reason, and they’re required to give you written notice in advance. The length of notice varies by province and policy type, but typically ranges from 15 to 30 days. Valid reasons for cancellation usually include things like:

• Non-payment of insurance premiums

• Misrepresentation (giving false information)

• Changes in the insured risk (e.g., major damage to your home)

If your insurance company doesn’t follow these rules, you may have grounds to file a complaint.

What to do if something doesn’t feel right

If you feel like your insurance provider is acting unfairly—maybe they’re delaying a claim, being unclear about coverage, or cancelling your policy without proper cause—here’s what you can do:

• Start by contacting the insurance company’s ombudsman or customer service department (ask for everything in writing).

• File a complaint with your provincial or territorial insurance regulator. Each province has its own authority (e.g., FSRA in Ontario, AMF in Quebec).

• Keep detailed records of all emails, letters, and phone conversations.

• Consult a lawyer or consumer advocacy group if the issue isn’t resolved.

In Canada, policyholders are protected under both federal and provincial regulations, so don’t hesitate to speak up if something doesn’t feel right. You have every right to expect fair treatment and clear communication from your insurance provider. To learn more about your rights as a policyholder in your province or territory, reach out to BrokerLink today.

What are the policyholder's responsibilities?

As we’ve mentioned, being the policyholder means you own the insurance policy, and with that ownership comes responsibility. Whether it’s life, auto, home, or supplemental health insurance, the policyholder plays a central role in keeping the policy active, accurate, and effective. Your key responsibilities:

Your responsibilities as the policyholder

Of course, with all that control comes a list of responsibilities:

Paying premiums on time

It might sound like a no-brainer, but this is crucial. If you miss a payment, your coverage could lapse, and in Canada, that can lead to anything from denied claims to having to reapply (possibly at a higher rate). Some provinces require continuous coverage, especially for things like auto insurance.

Keeping your policy up to date

Life moves fast; marriage, a new vehicle, a move to another province. It's your responsibility to inform your insurance provider of any changes that could affect your policy. Failing to do so could impact your ability to make a claim down the road.

Renewing your policy

Some policies renew automatically, others don’t. Even if yours does, it’s smart to use renewal time to review your coverage, especially if your circumstances have changed. That might mean adjusting your deductibles, adding optional coverages, or shopping around for a better fit.

Filing claims

If something happens (like a fender bender, a basement flood, or a health emergency), you’re responsible for contacting your insurance company, submitting documentation, and staying in touch throughout the claims process.

Consequences of neglecting your responsibilities

Neglecting your responsibilities as a policyholder can lead to some serious consequences. Miss a few payments? Your policy might be cancelled. Forgot to update your contact information? You might not receive important updates, like a notice of non-renewal or changes in terms. And if you fail to disclose key details in your application, that could result in claim denial, especially if the information was material to the risk.

Common mistakes policyholders make

Here are some common mistakes that policyholders sometimes make that can have major consequences:

Forgetting to update beneficiaries

This one’s huge. If your life changes (e.g., marriage, divorce, birth of a child) but your beneficiary list doesn’t, your benefit could go to the wrong person.

Ignoring policy renewal notices

Many people toss these in the mail pile. Don't. Use renewal time as a chance to reassess your coverage to make sure it still fits your needs and lifestyle.

Assuming coverage details

Just because it seems like it should be included doesn’t mean it is. For example, water damage from seepage may not be covered under a standard home policy unless you’ve added that protection.

Missing payment deadlines

A late payment grace period might apply, but repeated late payments can result in cancellation or make it harder to get reinsured elsewhere.

How to become a policyholder

Thinking about getting insurance? You're not alone. According to Statista, about 70% of Canadians have supplementary health insurance to cover services not included in public health plans, and Samos reports that approximately 89.9% of Canadians have life insurance coverage. Plus, with liability coverage mandatory for all drivers in Canada, almost everyone in Canada has some form of insurance.

Whether it’s to protect your car, your home, your health, or your family’s future, becoming a policyholder in Canada is a fairly simple process, as long as you know what to look for. Here’s a step-by-step breakdown of how to become a policyholder:

1. Decide what you need to insure

Start by figuring out what kind of coverage you’re looking for. Are you trying to insure your vehicle (which is mandatory in every province), protect your home or condominium, supplement your provincial health care with private benefits, or set up life insurance to protect your loved ones? Each type of policy comes with its own features and responsibilities.

2. Research providers and coverage options

Not all insurance companies or policies are created equal. Compare a few different providers, check out their reviews, and get a feel for what’s included in their policies. Make sure you understand terms like premiums, deductibles, coverage limits, and exclusions.

If you're feeling overwhelmed by all the options out there, reach out to a local insurance broker like BrokerLink for help. We know the ins and outs of the insurance industry, and we can help you find a policy that fits your needs and budget.

3. Get a quote

Most insurance companies offer free quotes online or through an insurance agent. You’ll answer a few questions about what you’re insuring (like your driving history, medical background, or the value of your home) and get an estimate of your monthly premium.

4. Choose your policy

Once you’ve reviewed your options, select the policy that best fits your needs and budget. Pay close attention to the fine print, especially what is and isn’t covered. If you come across something that you do not understand, ask your broker or agent to explain it to you.

5. Fill out an application

This is the official part. You’ll complete an application with your personal details and, in some cases (like life or health insurance), you may need to complete a medical questionnaire or exam.

6. Make your first payment

Once approved, you’ll pay your first premium, and just like that, you’re the policyholder!

Contact BrokerLink to learn more

Still have questions about policyholders? For over 30 years, BrokerLink has helped Canadians find their insurance policies. Our knowledgeable and friendly insurance advisors are available to answer your questions.

No matter what your insurance needs are, BrokerLink is here. You can reach us by phone, email, or in person at one of our many locations across Canada. You can also request a free quote on any type of insurance using our online quote tool. Simply answer a few basic questions about yourself and the type of insurance you require, and you'll receive an accurate and competitive quote in minutes. Please note that all BrokerLink quotes are 100% obligation-free.