Insurance companies take into consideration many different factors when determining the risk factor. Driving history is one such factor which affects the level of risk. Of your driving history directly affect the rate of your auto insurance premium as a blemished driving history means higher premium rate as the risk is higher with the probability of accidents is more. If a driver has bad driving history he will be excluded from coverage.
The liability laws differ with each state. If an excluded driver causes an accident the driver and the car owner will be held responsible for the accident. In that case the car owner’s policy will not pay for the other person’s injury and damages. The excluded driver or the car owner must compensate the other person’s medical and repair costs personally. To make this clear, the insurance companies will not cover a driver who is specifically mentioned in the policy as an excluded driver.
If you have auto insurance policy and you have named a person as ‘excluded’ in it, this person will not be covered under this auto insurance policy. He will not be covered even if you have permitted him to drive your vehicle. The naming as excluded driver is an endorsement on your policy and is a legal document which you sign at the time of purchasing your auto insurance policy. This endorsement clearly states that the name driver is excluded from the coverage provided by this policy. The exclusion applies to all vehicles in the household. Check with your insurance company if you must list the excluded driver on the policy. Most of the insurers will allow exclusion of a household member and would insist that you carry some specific coverage and may add surcharge on your policy. Before purchasing your auto insurance, make it clear about declaring any member of your household as an excluded driver for the policy.
The car owner should think twice before allowing the excluded driver to operate his vehicle as his auto insurance policy will not cover any damages caused to others if the excluded driver causes an accident. Similarly, if you are hit by an excluded driver you should consult a lawyer to know your options to recover your loss.
As a policyholder you should make it sure that your premiums do not go skywards because a household driver’s DUI or multiple convictions or speeding tickets etc. Excluding the person from your auto insurance policy is a right move to consider in such circumstances.