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Written by:
Prachi Singh
Contributing Writer
Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.
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Reviewed by:
Laura Longero
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Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

With auto insurance, there is a difference between a loss payee and a certificate holder.

A loss payee is a person or entity with a legally secured insurable interest in another’s property, usually a financial institution that loaned money to buy a car. The car is the loan collateral. If the auto is damaged in an accident, loss payments will be made to you (the policyholder) and to the loss payee on your policy.

What is a certificate holder?

With a certificate holder, the certificate states in writing to the certificate holder that the named insured (you, the policyholder) has the specific coverage and limits listed on the certificate. It does not grant insurance coverage to the certificate holder. It only states that you have the specified coverages.

Being a certificate holder entitles that entity to receive notices of any changes in the policy. A certificate of insurance itself bestows no rights upon the holder. It is merely for informational purposes. The certificate of insurance usually lists the type of insurance, the amount of insurance, the insuring company, and contact information.

A certificate of insurance holder is not the same as someone designated as an additional insured or loss payee. An additional insured means the person or entity has been added to the original policy, and with the loss payee, payments by the insurer are made out to the named insured and loss payee. The certificate holder is just advised of the insurance that is on the vehicle and if any changes are made.

Yes, with auto insurance, there is a difference between a loss payee and a certificate holder.

What is a loss payee?

A loss payee is a person or entity with a legally secured insurable interest in another’s property, usually a financial institution that loaned money to buy a car. The car is the loan collateral. If the auto is damaged in an accident, loss payments will be made to you (the policyholder) and the loss payee on your policy.

With a certificate holder, the certificate states in writing to the certificate holder that the Named Insured (you, the policyholder) has the specific coverage and limits listed on the certificate. It does not grant insurance coverage to the certificate holder. It only states that you have the specified coverages.

Being a certificate holder entitles that entity to receive notices of any changes in the policy. A certificate of insurance itself bestows no rights upon the holder. It is merely for informational purposes. The certificate of insurance usually lists the type of insurance, amount of insurance, the insuring company and contact information.

A certificate of insurance holder is not the same as someone designated as an additional insured or loss payee. An additional insured means the person or entity has been added to the original policy and with the loss payee payments by the insurer are made out to the named insured and loss payee. The certificate holder is just advised of the insurance that is on the vehicle and if any changes are made

 — Penny Gusner contributed to this story.

Laura Longero

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Laura Longero

Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

John McCormick

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John McCormick

Editorial Director

John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

Leslie Kasperowicz

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Leslie Kasperowicz

Managing Editor

Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.

Nupur Gambhir

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Nupur Gambhir

Managing Editor

Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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Contributing Writer

Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.