What is an excluded driver?

Auto insurance is an important product designed to financially protect you and other drivers each time anyone gets behind the wheel of your car. While car insurance coverage can extend to other legal drivers in your home — such as a spouse or adult child — what happens when you specifically want to exclude someone from your policy?

Here’s a look at what an excluded driver is, how to add one to your policy and how excluded drivers can impact your coverage.

As the name suggests, an excluded driver is someone explicitly named in your auto insurance policy as being excluded from coverage. Once someone has been named as an excluded driver, your auto insurance will not cover them when driving any of the vehicles listed on your policy.

This is important as you are generally able to lend your vehicle to family members, household members and friends, and your auto insurance will cover them. Once you have named someone as an excluded driver, however, they will be unable to drive any of your vehicles under the umbrella of your coverage.

If an excluded driver does drive your vehicle and is involved in an accident, your auto insurance policy usually won’t extend any liability or collision coverage to them or the vehicle. In some states, a limited amount of coverage is offered to excluded drivers, but this depends on your location and policy (so be sure to ask your carrier!).

Reasons for excluding a driver from coverage

There are many reasons why you might decide to exclude a driver from your car insurance policy, not the least of which is to save money on your premiums. Some reasons to exclude certain drivers include:

• You don’t want them driving your vehicle. You may live with people you simply don’t want using your car, such as a roommate or adult sibling. While many policies will automatically extend coverage to occasional drivers — or even require you to add other adults living in the same home — naming them as an excluded driver means they cannot legally drive your vehicle.

• They’re young or inexperienced. A new or inexperienced driver, such as a teenager, can wreak havoc on your policy’s premiums, especially if they later get in an accident or get traffic citations. Instead of adding them to your existing coverage, you can name them as an excluded driver and then purchase an individual policy in just their name, customizing the coverage limits to their vehicle.

• They have a poor driving record. When there are other adults in your home, your carrier will typically want you to add them to the policy as a named insured or rated driver. If they have a history of traffic violations, DUIs, or have had their driver’s license suspended in the past, though, that poor driving record can come back to bite you in the wallet. Consider excluding this high-risk driver from your coverage and having them buy their own policy for their own car.

• They have a history of too many claims. You may choose to exclude a driver from your coverage if they’ve filed too many insurance claims in the past, even if those claims were on another policy or with another carrier. Insurance companies will look at claims history when rating drivers and calculating premiums, so excluding them from your policy can save money.

You don’t want them driving your vehicle. You may live with people you simply don’t want using your car, such as a roommate or adult sibling. While many policies will automatically extend coverage to occasional drivers — or even require you to add other adults living in the same home — naming them as an excluded driver means they cannot legally drive your vehicle.

They’re young or inexperienced. A new or inexperienced driver, such as a teenager, can wreak havoc on your policy’s premiums, especially if they later get in an accident or get traffic citations. Instead of adding them to your existing coverage, you can name them as an excluded driver and then purchase an individual policy in just their name, customizing the coverage limits to their vehicle.

They have a poor driving record. When there are other adults in your home, your carrier will typically want you to add them to the policy as a named insured or rated driver. If they have a history of traffic violations, DUIs, or have had their driver’s license suspended in the past, though, that poor driving record can come back to bite you in the wallet. Consider excluding this high-risk driver from your coverage and having them buy their own policy for their own car.

They have a history of too many claims. You may choose to exclude a driver from your coverage if they’ve filed too many insurance claims in the past, even if those claims were on another policy or with another carrier. Insurance companies will look at claims history when rating drivers and calculating premiums, so excluding them from your policy can save money.

How excluded drivers affect your claims and premiums

If there is a driver in your home who isn’t allowed to drive your vehicle(s) and/or has a poor driving history, one of the best things you can do for your insurance rates is add them as an excluded driver.

If this bad driver isn’t excluded from your policy, your carrier may require you to include them as an authorized or rated driver, especially if they live in your home. If they are an inexperienced driver, have a history of accidents or claims, or have a driving record riddled with moving violations or license suspensions, you may find that your premiums are affected. This is often the case even if you don’t actually give that individual permission to drive your vehicle.

By adding them as an excluded driver, both you and your carrier reduce your overall level of risk. Your insurance company is no longer responsible if they drive one of your listed vehicles and get in an accident. Your insurance premiums no longer take their driving history into account, saving you money.

Except in certain states, auto insurance companies do not extend any coverage to a named excluded driver. This means that any property damage, bodily injury, or personal injury protection coverage is null when the excluded driver is behind the wheel, and you may find yourself on the hook for any and all losses.

Except in certain states, your car insurance company will not extend any coverage to a named excluded driver. This means that any property damage, bodily injury, or personal injury protection coverage is null when the excluded driver is behind the wheel, and you may find yourself on the hook for any and all losses.

Just because a driver is excluded from one policy doesn’t mean that they cannot have their own insurance. In fact, if that individual plans to drive and/or has their own vehicle, they will need to purchase auto insurance.

If that individual is involved in an accident while driving another vehicle (other than one covered by the named exclusion policy in question), their own coverage may kick in to cover any losses.

What happens if you allow an excluded driver to operate your vehicle?

So, what if an excluded driver gets in an accident while behind the wheel of a vehicle from which they are technically “excluded”? It really comes down to the state and even the individual policy.

If the excluded driver is determined to be at fault, they (and possibly you) may be liable for any losses the other driver incurred.

If the other driver is deemed at fault for the accident, there’s a good chance that their liability policy will cover any losses incurred, even if the excluded driver wasn’t supposed to be behind the wheel. This will be determined by the insurance adjusters following the accident.

With that said: if you name someone as an excluded driver and then allow them to drive your vehicle, your insurance company is likely going to be unhappy. At the very least, as the policyholder you may be required to add that individual as an authorized driver. You can also expect your premiums to rise.

How to exclude a driver from coverage

Every car insurance company has its own process for naming excluded drivers from a policy. In most cases, you’ll be asked to sign and submit a driver exclusion form as part of the process.

It’s important to note that not all states allow for excluded drivers. Some states may offer limited coverage to excluded drivers, even after they are named on a policy. And in other cases, excluded drivers may only be added once you have shown that they have their own valid auto insurance coverage.

You will want to look up the specific rules in your state and also speak with your carrier to see what excluded driver options you have, before moving forward.

You’ll need to contact your insurance company if you want to remove an excluded driver — whether to add them as a covered driver if they improved their bad driving record, for example. Or to take them off your policy altogether, perhaps because they moved out of your home. In any case, bear in mind that your car insurance rates could be affected.