Auto Insurance: Understanding Driver Exclusion And Its Impact

Excluding a driver from your auto insurance policy means that they are no longer covered by your insurance and cannot drive your vehicle. This is usually done to avoid insuring a high-risk driver or to reduce insurance costs. However, it's important to note that not all states allow policyholders to exclude household members, and there may be restrictions on which drivers or coverages can be excluded. If an excluded driver gets behind the wheel and causes an accident, they will be considered an uninsured driver and may face legal repercussions.

Excluding a high-risk driver may lower insurance premiums

Excluding a high-risk driver from your auto insurance policy may result in lower insurance premiums. When you buy car insurance, insurers typically require all drivers in your household to be listed on your policy. This is because, from a safety standpoint, it makes sense to keep everyone covered, regardless of which car they drive or how often they drive. However, this can lead to higher premiums if one of the listed drivers is deemed high-risk.

A high-risk driver is someone with a history of violations, such as DUIs, speeding tickets, or at-fault accidents. Insurance companies consider these drivers more likely to file a claim, and so they increase the cost of the insurance policy to account for this higher risk. By excluding a high-risk driver from your policy, you can avoid these increased costs.

However, excluding a driver from your policy is a serious decision that should not be taken lightly. Once a driver is excluded, they are no longer legally allowed to drive any of the vehicles on your policy and will not be covered by your insurance if they do. If an excluded driver gets into an accident while driving one of your vehicles, they will be considered an uninsured driver and will be liable for all damages and injuries resulting from the crash. Additionally, you may also be held responsible for any damages, and your insurance policy may be cancelled or not renewed.

Furthermore, not all states or insurance companies allow driver exclusions. Some states believe that excluding drivers increases the number of uninsured drivers on the road and, therefore, prohibit the practice. Before excluding a driver, be sure to check the laws in your state and the policies of your insurance company.

Excluding vs removing a driver from a policy

Excluding a driver from your car insurance policy means that they are specifically not covered by the policy, usually because they are a high-risk driver. A high-risk driver might have a history of moving violations, at-fault accidents, DUI convictions, speeding tickets, or other issues. Excluding such drivers can help to reduce insurance costs. However, it's important to note that not all states allow driver exclusions, and some insurance companies may not permit it either. If an excluded driver operates your vehicle and has an accident, they will not be covered by your insurance.

On the other hand, removing a driver from your car insurance policy means that their name is completely taken off the policy. This is typically done when a driver no longer lives with you and no longer drives your vehicle, such as when a child leaves for college or a spouse moves out. Removing a driver may or may not reduce your insurance rate, depending on the driver's history of claims, accidents, and traffic violations.

The main difference between excluding and removing a driver is that an excluded driver is still listed on the policy as "excluded", whereas a removed driver is taken off the policy entirely. It's important to note that if an excluded or removed driver gets into an accident with your vehicle, your insurance policy may not cover the incident.

The decision to exclude or remove a driver depends on various factors, including the driver's relationship to the policyholder, their driving habits, residence, and the potential impact on insurance premiums. Excluding a high-risk driver may be necessary to avoid high insurance costs, but it's important to understand the implications, as the excluded driver will not be covered by your insurance in any scenario. Removing a driver may be a simpler option if they no longer have access to your vehicle or have obtained their own insurance.

When to exclude a household member

An excluded driver is a household member who is specifically left off your car insurance policy. Their name will be listed as "excluded" on your policy, and they won't be insured to drive any vehicles on your policy.

• Risky or flawed drivers: If a household member has a poor driving record, multiple accidents, drunk driving convictions, speeding tickets, or a suspended or revoked driver's license, excluding them may be necessary to avoid high insurance costs.
• Elderly or health concerns: If an elderly relative, such as an aunt, has access to your car but their health is failing, excluding them from your policy may be a good idea. This is to ensure they don't jeopardize themselves or others if they get behind the wheel.
• Teen drivers: Teen drivers can be expensive to insure. In some cases, it may be more cost-effective to buy a separate policy for the teen and exclude them from your own policy, especially if they have a clean driving record.
• Non-driving household members: If you have household members who don't drive or don't need to be insured on your policy, such as unlicensed teenagers or those under the age of 14, you can exclude them.

It's important to note that not all states allow policyholders to exclude household members from coverage. Some states prohibit excluding anyone of driving age, while others may require excluded drivers to have their own insurance first. Be sure to check with your state's regulations and your insurance provider for specific guidelines.

How to exclude a driver from your policy

An excluded driver is a household member who has been explicitly removed from coverage under your car insurance policy. Their name will show as "excluded" on your policy, and they won't be insured to drive any vehicles on your policy.

• Contact Your Insurance Company: Reach out to your auto insurance provider to initiate the process of excluding a driver. Not all insurers or states allow driver exclusions, so it's essential to check with your insurer.
• Fill Out and Sign a Driver Exclusion Form: You may need to complete and sign a driver exclusion form, also known as an endorsement or insurance rider. This form will specify the excluded driver and the conditions that won't be covered. Both you and the insurer will sign this form to confirm the exclusion.
• Understand the Consequences: Excluding a driver means they won't be legally allowed to drive any of your insured vehicles. If they cause an accident while driving your car, they will be considered uninsured, and both of you may be held liable for damages and injuries.
• Consider Alternatives: Before excluding a household member, explore alternative options. Compare insurance quotes, ensure the risky driver is the primary driver on a safe vehicle, and look into defensive driving classes or discounts for older drivers.
• Be Mindful of State Laws: Note that not all states allow policyholders to exclude household members. Some states prohibit named driver exclusions entirely, while others may require excluded drivers to have their own insurance first. Check your state's laws and your insurer's specific requirements.
• Understand the Reasons: Typically, drivers are excluded due to their risky driving behaviour, such as drunk driving convictions, a poor driving record, or a suspended license. Excluding them can help lower your insurance premiums, as the insurer will no longer consider their driving history when calculating your rates.
• Inform the Excluded Driver: Ensure that the excluded driver is aware of their status and that they are not permitted to drive your insured vehicles. Any accident they have while driving your car may result in significant financial consequences and legal issues.
• Review and Update Your Policy: Periodically review your policy to ensure it remains up to date. If you wish to remove the excluded driver's status, contact your insurer and submit a formal request. They may approve or deny the request based on the circumstances.

Remember, excluding a driver from your policy is a serious decision with potential financial and legal implications. Always consult your insurance provider and carefully review the terms and conditions before proceeding.

What happens if an excluded driver causes an accident?

If an excluded driver causes an accident, the consequences can be significant for all parties involved. Here's what you need to understand about the situation:

Insurance Coverage

The insurance policy will not provide coverage if an excluded driver operates the insured vehicle and gets into an accident. The insurance company has a special rule or agreement with the policyholder stating that this specific person is not covered when driving the insured car. As a result, the insurance company will not pay for any damages or liabilities arising from the accident.

Financial Responsibility

The responsibility for covering the costs of the accident, including repairs and medical bills, falls on either the vehicle owner or the excluded driver. They will have to pay out of pocket for any accident-related expenses since the insurance company will not provide financial protection.

Impact on Insurance Record

The accident involving an excluded driver could negatively affect the policyholder's insurance record, potentially leading to increased premiums in the future. The insurance company may consider the accident as a high-risk factor and decide to increase the premiums to manage their risk.

Legal Consequences for the Excluded Driver

The excluded driver who caused the accident may face legal consequences, depending on the severity of the incident and the applicable laws. They may be subject to traffic violations, fines, license suspension or revocation, and even criminal charges if their behaviour was reckless or involved driving under the influence.

Challenges for Injured Parties

The injured parties in the accident may face challenges in seeking compensation for their losses. They may need to pursue alternative options, such as personal injury lawsuits or uninsured/underinsured motorist coverage, to recover damages for medical expenses, lost wages, and pain and suffering.

Policy Cancellation or Non-Renewal

In some cases, the insurance company may decide to cancel or not renew the policy after an accident involving an excluded driver. This can further complicate the situation for the policyholder, as they may struggle to find new insurance coverage, especially at affordable rates.

Communication and Understanding

It is crucial for policyholders to maintain open communication with their insurance company and clearly understand the terms and conditions of their policy. By excluding a driver, the policyholder agrees to this exclusion to manage risks and control insurance costs. Any violation of this agreement can lead to the consequences outlined above.

Frequently asked questions