Are excluded drivers covered in an accident?

Your insurance company can hold you responsible for damages to your car if you exclude a driver from your policy and then they drive with your permission afterwards.

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UPDATED: Jun 8, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 8, 2022Fact Checked

Here's what you need to know...

  • An excluded driver is not covered under your policy and should not drive your vehicle, but they may be covered under another policy
  • If you give an excluded driver permission to use your car and they get into an accident, the insurance company may hold you responsible
  • When an excluded driver uses your car without permission, the insurer is unlikely to hold you responsible if they get into an accident

When you get insurance coverage for your vehicle, you typically need to list any other drivers in your household on your policy. In some cases, though, you may decide to exclude a driver from your coverage. If you do, that person cannot drive your vehicle.

But what happens if they do drive your car? Are excluded drivers covered in some situations? Let’s take a look at how it works.

Are excluded drivers covered by insurance?

Excluded drivers are usually not covered by your insurance in an accident. There are a few different factors that decide whether or not auto insurance will cover other drivers. The most significant example comes from when you specifically exclude someone from driving your vehicle and then allow them to drive without correcting that exclusion. According to the Insurance Information Institute, for the insurance company to cover them, it would have to factor their risk profile into your premiums. And when you omit them from your policy, they are not considered in your rate calculations.

Keep in mind that an excluded driver may be covered if they are passengers in your insured vehicle or have other kinds of insurance, such as no-fault insurance coverage. However, if they’re excluded from your policy, you should not allow them to drive your vehicle.

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Why have an excluded driver on an insurance policy?

Suppose you have always listed all household members on your auto insurance policy. But one of your relatives is a problem driver who keeps drinking and driving. As a result, they have gotten into multiple accidents and forced you to file claims several times. In that case, your insurance company may give you an option to pay higher rates, cancel your policy, or exclude that problematic member of your household from your insurance.

Unless you want to pay more for car insurance or lose coverage with your insurance company, you are better off excluding the person in question. 

You may also choose to exclude a driver of your own free will if they pose a risk to your vehicle and their behavior is likely to increase your rates. For example, if you have a roommate that has been convicted of stealing cars in the past, you are better off excluding them from your insurance. Also, if a member of your household likes to drink and drive and had their license privileges taken away at one point, you can’t afford to trust them with your car — and neither can the insurer. A suspended license can affect car insurance rates, and you shouldn’t want someone to put your budget at risk. 

Having an excluded driver on an insurance policy is a financially savvy move if you don’t want to be responsible for the behavior of someone with a terrible driving record or bad driving habits.

How do insurance companies treat excluded drivers?

Generally, once you’ve excluded someone from your coverage, the insurance company considers them unable to drive your car. However, if they do drive and have an accident, the claims process will depend on whether you gave them permission to drive.

If You Gave Permission

First, if you allow an excluded driver to use your vehicle and they have an accident, you will typically be liable for any damages and injuries that person causes. Your insurance company will probably refuse to pay for your claims, and you could get sued. Your only other option will be to go after the driver in question to force them to pay for your expenses.

If You Didn’t Give Permission

However, suppose the excluded driver stole your car and hit someone. In that case, you likely won’t be held accountable for their actions. Instead, the driver in question will be held responsible for the damages, and the injured party may sue the excluded driver.

What kind of insurance would cover an excluded driver?

An excluded driver may be able to drive your vehicle if they have their own insurance. If the excluded driver has liability insurance and no-fault auto insurance coverage, it may pay for injuries and damages to other people’s property in an accident.

Alternatively, if you have uninsured/underinsured motorist coverage and an excluded driver damages your car, you can file a claim to get compensation for the damage to your vehicle. And if an excluded driver steals your car and gets involved in an accident, you need to file a police report and file an insurance claim. Your comprehensive car insurance may cover the damages as a result of theft.

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Don’t Let Excluded Drivers Use Your Car

Excluding a driver is a good idea if their behavior will push your insurance rates through the roof or put your car at risk. When an excluded driver uses your vehicle and causes an accident, your policy is unlikely to cover them. And if you gave them permission to drive, expect to be on the hook for the bills.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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