Glossary
Named driver exclusion, defined
An endorsement that removes a specific person in the household from an auto policy, so that if that person drives the insured car there is no coverage at all for the loss. The carrier agrees to rate the policy without that person's record in exchange for excluding them entirely.
In practice
It is used when a household member has a record that would make the policy unaffordable or unwritable: a suspended licence, a DUI, a string of at-fault accidents, or a teenager who has their own policy elsewhere. The consequence is absolute. If the excluded person takes the car, even in an emergency, the policy pays nothing for their liability or the damage to the car, and the owner may be personally liable to the other party. Some states do not permit it, and some carriers require the excluded person to sign the form. It is not the way to handle a driver who occasionally borrows the car; that person should be listed. Review it when the excluded person's situation changes, since the endorsement does not expire on its own.
A worked example
Suppose a father excludes his son, whose licence is suspended, and the premium drops from $2,400 to $1,500 a year. Suppose the son drives the car anyway and causes $30,000 of injury and damage. The carrier declines everything, the father faces the claim personally, and the $900 saved is beside the point. Hypothetical figures.
Applies to: Auto Insurance