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While it can be embarrassing or even painful, you might find it necessary to let someone out of your auto insurance policy. But why? One of the main reasons may be that you want to prevent a risky and expensive driver from being covered by your auto insurance.
Most states allow you to write down the names of people you want to exclude from your auto insurance policy. This is called a named driver exclusion. Typically, auto insurance policies extend coverage to all licensed members of your household, unless you request an exclusion.
But when you intentionally exclude someone from your insurance policy, your insurance company will not cover claims for injury or damage caused by that person.
Nine states ban exclusions for named drivers, according to the American Property Casualty Insurance Association, an industry group: Hawaii, Kansas, Minnesota, New York, North Carolina, Rhode Island, Vermont, Virginia and Washington. These states prohibit these exclusions because they believe this practice expands their pool of uninsured drivers.
Plus, your auto insurance company may not even allow driver exclusions.
But if your state and your insurer allow named driver exclusions, any exclusion of a driver will last until you change their status.
How to exclude someone from your auto insurance
Obtaining an exclusion is done by means of a rider or a policy rider, which changes your coverage. You will either need to contact your insurer to obtain an exclusion, or you will need to log into your online account and do it yourself. You can also request that an excluded driver be added to your policy.
The main reason for excluding someone is to reduce your insurance premiums. This is because an insurer takes the driving record of every licensed driver in your household into account when setting your premiums, and a licensed driver who is considered risky will likely increase your bill.
Here are three scenarios where an exclusion may be appropriate.
You may not want to shoulder the risks and potential costs of adding a high risk driver to your policy. Among those that fall into this category are drivers who have recently been convicted of impaired driving, suspended or revoked driver’s licenses, or generally poor driving records. For example, you might want to exclude an adult child who lives with you who has lost their driver’s license.
If, however, a bad driver who is excluded from your policy gets behind the wheel of your car and causes an accident, the damage or injury will generally not be covered. As such, you or the excluded driver may be held personally liable for any damage or injury. In addition, your policy could be canceled or not renewed.
By the way, an insurer might require that a driver be excluded from your policy because of their terrible driving history or other issues. The exclusion would at least allow you to keep the contract for the other members of the household.
A teenage driver
It can be quite difficult to find cheap auto insurance for a teenage driver. And generally, it’s cheaper to put a teenager on a parent’s policy rather than a separate policy. But in some cases, after doing the math, it may be best to buy a separate teen policy and exclude it from your own policy.
But if the excluded teenage driver borrows your car and wrecks it, the damage or injury usually won’t be covered. In addition, your insurer may cancel your policy or refuse to renew it.
Your grandmother Helen lives with you. But even if she has access to your car and holds a driver’s license, you don’t want her to drive it as her health deteriorates and she can endanger herself and the vehicle if she gets behind the wheel. In this situation, it may be a good idea to exclude Grandma Helen from your policy.
Just like with a teenage driver, if Grandma Helen is an excluded motorist but drives your car and runs over it, your insurer will not cover any damage or injury. You would want to make sure that she can no longer access your vehicle once an exclusion is in place.