Excluded driver. The term itself feels kind of lonely. Like a name you would call a person who has been left out of a game on the playground. However, in the world of auto insurance, excluding a driver is no game. It is a serious act taken to financially safeguard the policyholder and the auto insurance company.
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What Is An Excluded Driver?
For many car insurance companies, the official term is a “named driver exclusion.” This provision excludes a certain driver from using a policyholder’s vehicle. Normally, an auto insurance policy covers every motorist living under the same household . For example, let’s say a forty year-old motorist named Fred takes out an insurance policy. If Fred has a wife and two children of driving age, they too would be covered under the policy when they drive the family vehicle (or vehicles). Fred also has the option of specifically naming a member of the household who would not be covered under the auto insurance policy. Let’s say Fred’s brother, Phil, moves into the house. Fred does not want this brother covered under his insurance policy, so he specifically excludes Phil.
Why Would Someone Exclude A Driver?
Why would Fred go to the trouble of excluding his brother from his car insurance policy? Well, Phil may have a terrible driving record. Perhaps Phil has a DUI or even a suspended or revoked license. In these instances, if Phil were to be added to Fred’s policy, most likely Fred’s premiums would sky rocket. In order to prevent this financial burden, Fred would fill out an operator exclusion form and specifically state his brother is not covered under the policy. Thus, even though Phil is living in the same household, he is not under Fred’s policy and Fred’s premiums remain unaffected.
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What Happens If The Excluded Driver Uses The Policyholder’s Vehicle?
A policyholder excludes a driver in order to prevent his or her premiums from increasing. But by doing so the policyholder cannot allow the excluded driver to operate the policyholder’s vehicle. Consider the following example. Even though Fred has named his brother as an excluded driver, he still allows Phil to take the car for short trips. Well, Phil gets into an accident, totals not only his vehicle but also wrecks another car and injures the other driver . Guess who would be on the hook for the damage costs and medical bills? It won’t be Fred’s auto insurance company, since Phil is excluded from the policy. And if Phil has limited assets, the other driver could sue Fred. Since it was Fred’s vehicle, he could be held liable even though he wasn’t driving at the time. So Fred could owe thousands, possibly hundreds of thousands of dollars to the other driver.
The above example illustrates why you should be cautious about excluding another driver that lives in your household. If you decide to do so, you can’t let that driver operate your car. Ever. Even if it’s an emergency, because if the excluded motorist happens to get into a wreck, you could be held liable. The only way Fred could get his car insurance company to pay for his brother’s accident is to declare that Phil stole the car, which of course creates a whole other set of issues.
So proceed with caution and realize that naming an excluded driver is a risky venture and something that should not be taken lightly. It’s understandable why a policyholder would want to prevent their premiums from increasing; but in such a scenario the policyholder cannot allow the excluded driver to use the policyholder’s vehicle.
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