Usually, vehicle insurers automatically include every driver in a household in premium calculations and on a policy if they end up selling it. At times it may be necessary for financial or practical reasons to drop someone off coverage. A young person or someone with a bad record can increase rates a lot and it is only natural that you would want to see if it is avoidable. But you should remember that such people should never operate the car if they are not included. Let’s have a look at the definition, circumstances that it can serve best and cannot be applied.
Driver exclusion is an endorsement that explicitly prohibits a member in a household (spouse, roommate, live-in nanny, licensed teenager) from an auto insurance policy. It confirms that the banned driver will not have access to the automobile and will not be insured if an accident were to occur when such person was in charge.
There could be several reasons to go this route. Most important one is the bad history that raises rates to unaffordable levels. For example, a partner my have a DUI on his record and this would make it expensive and reduce the number of sources available substantially.
There is a good chance premium savings will be large enough for the troubles if it can be successfully applied and the risk of such strategy coming back and hurting is negligible.
Insurers or policyholders may be able to use a driver exclusion clause to leave a problematic person out of car insurance coverage in order to limit such individual’s effects on costs and risk levels. Otherwise, the exposure becomes too much to accept for a carrier or the premium too high to pay for a vehicle owner.
Some companies may not be keen on this idea and they have their own reasons. Others may allow it in general, except certain states. The problem is that there have been court cases where they had to pay for the damages that were caused by excluded drivers. Also, the owner of the automobile can be liable following accidents caused by the left out individual. That is why underwriters can still take the existence of such a resident into account when they calculate premiums.
This may still be the case when they offer automobile insurance without license under special conditions. They still consider the existence of an unlicensed person when calculating quotes, even though they agreed that someone else will be chauffeuring or it won’t be taken out on the roads at all.
Most companies would only allow exclusions of family members or residents in the same house if they have own cars and coverage. As mentioned before, few of them may not like the idea at all and stay away. They don’t want to be a party to problems occurring in such arrangements and they do happen.
In addition, there could be some policies sold in the market that come with driver exclusion clauses, which usually mean everyone under certain age. This is a commonly used solution to ensure that premiums remain affordable or risks acceptable. For example, most companies would only cover sports cars if they can have an endorsement, which bans everyone under the age of 25 getting hold of the keys. Otherwise, they consider the exposure to be too much to handle.
As a general rule, you should only accept (or request) such limitations if you are absolutely sure you can comply with them. It is worth mentioning again that owner of the vehicle is liable for injuries and damages caused by his vehicle regardless of who was behind the steering wheel, unless it is stolen. Essentially, it would be hard to argue the point that someone who is living with you took the car keys without permission. Number of people made that argument in the US courts and lost.