What does excluded driver mean?

What is an excluded driver?

An excluded driver is someone named on your car insurance policy who is not covered to drive your insured vehicle. This is usually a household member who would normally be included on the policy but has been officially listed as not allowed to drive the car. The policy documents will clearly identify that person as “excluded.”

If that person uses your car, either with or without your permission, and has an accident, your car insurance won't provide coverage.

Some states prohibit named-driver exclusionsItems that are specifically denied coverage under the terms of an insurance policy. For example, most auto insurance policies exclude coverage for normal wear and tear, drag racing and intentional acts. because they create uninsured drivers, something that puts other people on the road at risk.

Why would I want to exclude a driver?

You may want to exclude a driver from your policy if their age, driving record, claims history, or license status makes them significantly more expensive to insure. This helps lower costs for other household drivers. However, exclusions are only allowed if your insurer and state permit them, and the excluded person is not covered to drive any insured vehicle.

Common reasons include:

A household member has several accidents or violations
A young or inexperienced driver
Someone has a suspended or revoked license
A roommate has a separate vehicle and insurance policy
A household member does not drive or has surrendered a license
The insurer will issue or renew the policy only with an exclusion

When you compare car insurance quotes with or without that driver on your policy, you may see that there's a huge difference. Inexperienced drivers and those with tickets and accidents have the highest rates, and one way to avoid paying those rates is to exclude the driver from the policy.

To formally exclude a driver who would otherwise be insured on your policy, though, you’ll need to follow the proper steps with your insurance company.

Why does another driver's record affect my car insurance rates?

Insurers consider household drivers because they have access to insured vehicles and can cause accidents. Their age, driving history, claims, and license status all affect the household’s overall risk. Car insurance follows the vehicle, but policy restrictions and other available insurance can affect which company pays.

Even if the other driver has their own insurance, any accident that occurs in your car would be covered by your insurance. If that person isn't in your household, though, their driving record, including any tickets, won't affect your rates.

Insurance companies will require that any licensed driver in your household be listed on the policy so that they can properly assess the risk of insuring you.

How do I exclude my teenager from my car policy?

Ask your insurer whether state law and its underwriting rules allow you to exclude your teenager. You will need to disclose the teen and sign a named-driver exclusion form. The insurer may require proof that the teen has separate insurance, does not drive, or has surrendered their license.

Mercury Insurance, based in California, says its named-driver exclusion is popular.

"We have many excluded drivers on our policies, and we have many claims where the excluded driver was driving, and we deny coverage," says Kenneth Kitzmiller, the company's vice president and chief underwriting officer.

He says drivers need only fill out a form with an agent or contact the insurer directly to request a named-driver exclusion.

In other states, it may be harder or not even possible. Several states — Kansas, Michigan, New York, and Wisconsin — don't allow named-driver exclusions at all, calling the creation of an uninsured-driver policy antithetical to public policy. Some states prohibit exclusions only for spouses.

And, in states that do permit exclusions, insurers could be reluctant to expose themselves, just in case the excluded driver uses the car anyway.

How can an excluded driver still be a risk to the insurance company?

An exclusion can create serious issues after an accident. The insurer will investigate who was driving, whether the exclusion was properly added to the policy, and whether state law still requires any minimum level of coverage. Depending on the policy and state rules, there may be no coverage at all, or limited liability coverage that still applies in certain situations.

Exclusions don't always hold up in court, says Toni Matous, an agent with Magnolia Insurance Agency in Seattle.

"If there's a bad enough accident, the court's going to say, 'You knew this driver was in the house. You can't just with the flip of a pen absolve that… You insured this car, and this is the car that got in the accident," Matous says.

"At the very least, the insurance company is going to be spending a lot of time defending itself," she adds. "It's a situation that's not the easiest to maneuver."

What happens if I can't afford insurance unless I can exclude a driver?

If you can’t afford insurance without excluding a driver, tell the insurer the truth about every household driver and ask about available options. Do not hide a high-risk driver, because an undisclosed household member can lead to denied claims or policy cancellation. Exclusion availability depends on state law, the person’s circumstances and the insurer’s underwriting rules.

Matous, who represents nearly a dozen insurance companies, says insurers typically require the named driver to turn in their license first.

"So the only way they can't be a driver is if they can't be a driver," Matous says.

And even then, it can take some convincing. "An underwriter will only allow an exclusion to a longtime client, with excellent credit and everything else in order," Matous says. "And they will do it only as a courtesy."

What else can I do to get the driver excluded?

Contact your insurer or an independent insurance agent to review your household drivers. The insurer can tell you whether an exclusion is available and what documents are required. A roommate or family member with a separate vehicle and policy can be easier to classify, but you must still disclose the person.

"Get the car out of the insured’s name. Have it in the kid's name," Matous says. "Have the kid buy his own insurance."

Matous recommends that people contact an independent broker to review options when there's a problem driver before calling the insurer directly.

"You never want to be the person to call and say, 'Hey, I've got this problem driver,' because the usual response will be the insurance company will cancel your policy," she says.

Would an excluded driver be covered in an emergency?

No, and this is a common misperception. Even if the excluded driver takes the wheel in a medical emergency, the insurance company will argue it doesn't have to pay out in the event of an accident. You would personally be on the hook.

"I obviously don't recommend excluding anybody who has any potential possibility of driving any vehicle," Kitzmiller says.

Does the exclusion come off at the end of the policy period?

No. Do not assume the exclusion disappears when the policy renews. Driver exclusions remain in effect through renewals, reinstatements and policy changes. The person remains excluded until the insurer approves the change and issues updated documents confirming that coverage has been restored.

That means to get the excluded driver back on your policy, you’ll have to ask your insurance company for approval to add them back as a covered driver. Hopefully, the person is no longer a high-risk driver and will be accepted by your insurer. If not, you’ll need to shop around to find an insurance company that will.

Frequently asked questions

What happens if an excluded driver gets in an accident?

If an excluded driver gets in an accident while operating the insured vehicle, the insurance company may deny coverage for any resulting damages or injuries. Excluded drivers are explicitly listed in the insurance policy as individuals not authorized to drive the insured vehicle. So, any accidents involving them could result in the insurer refusing to pay for damages, leaving the policyholder responsible for the costs.

Can an excluded driver drive my car?

No. An excluded driver is not covered by your insurance and should not drive your car. If they do and cause an accident, your insurer can deny coverage, leaving you responsible for damages.

Is removing a driver the same as excluding one?

No. Removing a driver often means the person has moved out, no longer has access to the vehicles, or has obtained separate insurance. An excluded driver remains listed on the policy but is specifically denied coverage. Insurers may require documentation before either change is approved.