How Excluded Drivers Can Affect Your Car Insurance Rates and Claims Coverage

Car Insurance Rates

Some drivers assume they can let anyone drive their car and still be covered by the insurance company in the event of an accident. After all, the owner is still paying car insurance on the car. Unfortunately, insurance companies don’t always see it that way.

Here’s what you need to know about excluded drivers to avoid an unpaid car insurance claim.

What to Do About Excluded Drivers

Usually, policyholders can put anyone on their car’s driver list. Even those with poor driving records can be included, assuming owners don’t mind paying higher car insurance rates. There is no need to list everyone who may drive the vehicle, but it’s a good practice to list any licensed driver living in your household, especially drivers without their own cars.

Insurance companies assume that anyone without a car who lives within the household will use a policyholder’s car regularly. Keeping excluded drivers off this list will active the “Regular Use” exclusion in your policy, which means that future claims may not be covered when they’re behind the wheel.

The Cost of Uncovered Claims

In some states, the Regular Use exclusion only denies “optional” types of coverage, meaning that the insurance car owners purchased, with limits higher than state-regulated minimums, won’t be covered. Only bodily injury and property damage insurance will apply for damage and injury in another car, if the excluded driver was at fault.

The limits provided in this situation are very low and could easily leave policyholders or your unlisted drivers personally liable for damages.

Forced Exclusions and Listed Drivers

Some insurance companies won’t cover bad drivers at all. For example, insurers may require policyholders with teen drivers at home to be included on the list of drivers for a vehicle, even if the teen doesn’t have a driver’s license. In some states, the opposite applies. Companies can force customers to list teens as a covered driver and charge higher car insurance rates to cover that individual.

Policyholders who have others of driving age in the home should be sure to check with their insurance company about excluded drivers before committing to a policy. It’s the only way to know the true level of coverage and car insurance rates car owners can expect to receive.

(Photo credit: TheBusyBrain)