What is a lienholder?

I got a car loan from my bank. When I added full coverage to my car insurance, the agent asked if I had a lienholder to add. What's that?

Answer
If you’re unsure of what a lienholder is, don’t worry, you’re not alone! A lienholder is a finance term that represents the entity or lender that holds your loan.
Your bank or lender is your lienholder. Since you are financing your car, you need to add your bank to your insurance. To do so, have your bank’s name and address handy.
By adding a lienholder, you’re letting your car insurance company know that another party has an interest in the vehicle. When you finance your car, a bank or lender still has partial ownership. If your car is in an accident and totaled, any insurance payout would go toward what you owe on your loan.
If you haven’t already, comparison shop with other insurance companies. Anytime you make changes to your car insurance policy, exploring your options can save you money. Some insurance companies have fees for adding lienholders or charge more for full coverage. By comparing your options, you can get the best price.
If you need help, use the Jerry app. Jerry collects quotes from the top insurance providers to find you the best rate for the coverage you require!
Emily Maracle
Answered on Oct 25, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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