A named driver exclusion is a specific endorsement added to a car insurance policy, which explicitly prohibits a particular individual, who has access to the insured vehicle, from driving it. If this person operates the vehicle, they are not covered by the insurance, and the insurer will not provide coverage for any resulting damages. Typically, policyholders are expected to include all individuals of driving age in their household on the policy, allowing insurance carriers to assess the risk and adjust the premium accordingly based on the rated individuals.
At times, the vehicle insurer or policyholder may want to exclude a driver in the policyholder’s household from policy coverage. Insurers do this because they want to avoid insuring such a person because either it is a too high risk for them to accept or such a person doesn’t qualify for coverage. And policyholders may want to take this route so that they can save money by avoiding a high-risk driver to influence their premiums.
Once they are excluded from policies, they must follow this condition and not use the car at all since the insurance company won’t pay for any damages they cause so they would be driving without insurance. The vehicle owner may still be liable for letting the excluded person to use the insured auto and the excluded driver would be liable directly for the damages they cause. Financial responsibility laws hold drivers legally responsible for the damages they cause to third parties.
If an excluded driver ends up using your car and causes an accident, not only your insurer may decline to pay the damages but also they may consider this accident when they renew your policy and raise your rates or decline renewal because of it.
Although most states allow named driver exclusion in car insurance policies, several states (like New York) may not allow this practice. And some other states may require certain conditions to be met. For example, the person may need to have their own car and insurance before they can be excluded. So, motorists should check their state requirements first and their insurers for the conditions.
Not everyone living in your household would drive your car. At times, it may even be physically difficult for them to do so. For example, a student far away at college may still be considered living with their parents but they may be back at home only during holidays and they may not be driving at those times. So, parents may find it unnecessary to pay high rates because of such a teenager and want to exclude them to save money.
Motorists can take off anyone moving out of their home from their policies. This is different from named driver exclusion in auto insurance because they don’t need to be mentioned on the policies and they may not be excluded entirely. If they move out, they may still use the car occasionally with the permission of the policyholder and they may be covered in such circumstances. But the people who are clearly noted on the policy as excluded cannot drive the insured vehicle in any case. And people who live with you cannot be occasional drivers. They may need to be either included or excluded.
It is important to note that any driver exclusions don’t stop at the end of the policy term and are carried forward with the renewals so they need to be added back if they are going to start driving again.
People of driving age in your household should be mentioned on automobile insurance proposal forms and included on policies. However, there may be cases that those people push premiums up substantially or even make it impossible to find affordable coverage. Then, you may want to look at the option of leaving them out, providing it is allowed in your state.
In such cases, it is important to read the conditions carefully and abide by them. If the person needs to drive the car, it may be better to pay the additional premium and keep them covered. Also, it is always better to get a few quotes in such circumstances. While your current insurer may be keen to either exclude a driver or charge higher premiums, another provider may find the risks acceptable and only charge you reasonable rates.