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Texas insurance glossary

Lienholder

A lienholder is the lender with a financial interest in a vehicle it financed, listed on the title and on the insurance policy until the loan is paid.

Sources checked

The lender is on the title and on the declarations page, and being listed is what entitles it to notice — of a claim, of a cancellation, of the policy lapsing.

It also shapes the coverage. A financed vehicle is normally required by the loan to carry collision and comprehensive, which is a contract term rather than a state one: Texas requires liability, the lender requires the rest.

On a total loss the settlement goes toward the loan first, which is where gap insurance either exists or is missed.

Sources: TxDMV — title check before you buy; TxDMV — register your vehicle; TDI — home insurance glossary. Verified .

A definition, not legal advice and not a quote. Rules and figures change; confirm your own situation against the source named above, or with us, before you act on it. Last checked .

See also

  • Gap insurance Gap insurance pays the difference between what a totaled vehicle was worth and what is still owed on it, where the loan balance is the larger number.
  • Total loss A vehicle is a total loss when the cost to repair it, sometimes with the salvage value added, meets or exceeds what the vehicle was worth before the damage.
  • Actual cash value Actual cash value is what a vehicle was worth immediately before it was damaged, which is its replacement cost reduced by depreciation for age, mileage and condition.
  • Collision coverage Collision coverage pays to repair or replace the insured’s own vehicle after it hits another vehicle or an object, or overturns, whoever was at fault.
  • Declarations page The declarations page is the summary at the front of a policy naming the insured, the vehicles or property, the coverages, the limits, the deductibles and the term.

Where this is handled

Knowing what a coverage is called is not the same as knowing what is on your policy. One independent agency can read your declarations page with you and compare the markets that will write your record.

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