Understanding Driver Exclusions

(Everything you need to know.)

understanding driver exclusions

Everyone knows “that guy” that you wouldn’t trust behind the wheel of your car, even for a matter of life and death. For the truly unfortunate, “that guy” is a member of your household, and looks not only to your vehicles as a source of transportation but also to your auto insurance as a source for coverage.

Car insurance policies can be extremely broad, extending coverage not only for members of your household, but also others while using your auto with your permission. The broad nature of the policy is excellent from a coverage perspective, seeing as driving other people's cars is accepted in our society.

Since auto insurance typically “follows the car,” auto insurance companies typically pay a claim if the person driving the car at the time of an accident is you, your spouse, a family member, or a permitted user. But some drivers are so risky that you, or the insurance company, will simply want to eliminate them from coverage altogether. 

What Is an Excluded Driver? 

If you live with a teen driver, an older person, someone who rarely drives, or someone who has a very bad driving record, it can be very costly to list them as a household member on your insurance policy. It can even make getting car insurance difficult for you if that driver’s record is bad enough.

In some cases, you may be able to specifically exclude that driver from your auto insurance coverage, effectively eliminating their liability and physical damage coverage if they cause an accident. 

An excluded driver is someone you specifically and intentionally remove from your auto insurance policy. If they use your car, with or without your permission, and have an accident, your car insurance won't provide coverage. 

Some states, however, don’t allow named driver exclusions on auto insurance policies because doing so basically creates uninsured drivers. This is typically illegal, as well as risky for other drivers on the road.  

Driver exclusions are typically allowed under very specific circumstances, usually to ensure that a high-risk driver in your household doesn’t drive at all. Driver exclusions often apply to: 

  • Drivers with suspended or revoked licenses
  • Drivers with very bad driving records
  • Drivers with a recent DUI
  • Elderly household members who no longer drive

What Does Excluded Driver Mean on an Auto Insurance Policy? 

Car insurance typically operates under the principle of permissive use. First, you, the “named insured” on the policy, are covered. Your policy also covers any family members living in your household, including your spouse and children. Anyone else living in your household (e.g., a roommate or a partner) can be listed as a named insured on your policy, as well. 

What’s more, anyone who drives your car with your permission can be covered. So if you loan your car to a friend or neighbor who then causes an accident, the claim would probably be covered. 

But if a driver has been explicitly excluded from coverage on your policy, the permissive use concept is no longer valid and the insurance company is no longer required to cover any losses caused by the excluded driver. Damage to your vehicle won't be covered, and both you and the driver can be held personally liable (sued) for any damage caused to others in the crash.

Keep in mind that not all insurance carriers allow driver exclusions as a cost-saving measure or to obtain coverage that you’re ineligible for with the bad driver in the household. In other cases, an insurance company may insist that a high-risk driver be excluded in order to offer you coverage. Policies and procedures vary among car insurance companies. 

What Happens If an Excluded Driver Gets in an Accident? 

Once you’ve excluded a driver from your car insurance, it’s essential that they don't drive your car. This is basically the same as driving without insurance, and can have numerous costly consequences. 

If the excluded driver causes an accident while driving your car, you won't have insurance coverage. What’s more, you and the excluded driver can be held personally responsible for any injuries or damage resulting from the accident. It could also lead to the cancellation or non-renewal of your auto insurance policy. 

If an excluded driver takes your car without permission, it could be considered theft. That means car damage may be covered under your comprehensive coverage, if you have it. Depending on your state's laws, you might not be held liable for injuries and property damage caused by the excluded driver in this situation. You would, however, have to prove that the vehicle was stolen and file a police report.

Can I Sue an Excluded Driver? 

Whether you can sue an excluded driver depends on the laws in your state. But in general, if you’re in an accident that is the fault of a driver who is actually excluded from a car insurance policy, you can sue the driver directly. However, it’s often difficult or impossible to recover any compensation from an uninsured party even if you win a judgment in court.

What States Allow Driver Exclusions? 

Not all states allow driver exclusions. Those that do NOT allow named driver exclusions are as follows:

  • Kansas
  • Michigan
  • New York
  • Virginia
  • Wisconsin
  • Hawaii
  • Minnesota
  • Rhode Island
  • Vermont

In the states that do allow driver exclusions, it’s not always easy to do. Many insurance companies are reluctant to permit driver exclusions even if they’re allowed by the state. 

How to Find Excluded Driver Insurance

A local independent insurance agent can help you find the affordable auto insurance you need. If you are thinking about excluding a driver, your agent can help you understand the laws in your state, and find an insurance carrier that fits your needs. 

Independent agents aren’t tied down to one insurance company, so they can help you shop around for the best coverage for your unique household.

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