Are excluded drivers covered in the event of an accident?

If an excluded driver got in an accident in your car, you may be held responsible if you gave them permission to drive, or if you didn't specifically exclude them on your policy.

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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

UPDATED: May 4, 2022

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Here's what you need to know...

  • If a driver is excluded from your policy and you did not give him permission to drive your vehicle, you are not held responsible
  • If you didn’t specifically exclude the driver, you may be held responsible
  • If you excluded the driver on your policy but then gave him permission to drive, you can be held responsible

When an excluded driver gets into an accident in your car, the outcome depends on the circumstances. Just imagine that your spouse’s uncle Jack, who lives with you, is an excluded driver on all your vehicles for a myriad of reasons.

Uncle Jack decides one night, while you and the missus are out, to take the car for a spin. Next thing you know he has been in a terrible accident and severely injured a teenage boy coming home from baseball practice.

For you, if your uncle is truly an excluded driver on your vehicles, then you may still be liable for the accident unless you can prove that he took your car without your knowledge or permission.

What does an excluded driver mean?

An excluded driver is an individual who is not covered by your car insurance policy in the case of an accident or incident.

In most cases you, as the driver and owner of the vehicle, are the one who names this individual as being excluded from your insurance policy.

If you choose to exclude a member of your household or another possible driver of your vehicle, this person will not be covered for any reason, even if they drive your car in the case of an emergency.

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Why would you have someone as an excluded driver on your car?

The reasons for having someone excluded on your vehicle are many. In the above scenario Uncle Jack may be excluded by you because:

  • He has had numerous DUIs
  • He has felony convictions
  • He has an overall terrible driving record
  • You simply don’t trust him with your cars
  • He does not have a license
  • He has a suspended license

What excluding an individual on your insurance does is save you from the headache and financial burden if this person gets into an accident without your permission.

It also stops your rates from going through the roof to cover a high-risk driver. You don’t need a reason to exclude someone from your policy.

What if I simply don’t want “Uncle Jack” to drive the car but don’t exclude him?

In this case, you would be on the hook for the accident your uncle caused and most likely your premiums would go up. Not wanting someone to drive your car is very different than excluding them in writing on your car insurance policy.

If you feel uneasy about letting a friend, family member, or co-worker drive your car, then don’t allow them to drive.

If you feel so strongly that a certain person should never drive your car for the myriad of reasons previously mentioned, then most definitely exclude him or her on your auto insurance policy.

If you excluded Uncle Jack, but then let him drive your car anyway, then you too would be on the hook for any medical bills and repairs caused by this accident.

Your car insurance company would not pay out for damages due to Uncle Jack being an excluded driver. The other party would be able to seek damages not covered under their insurance from you personally.

What type of insurance should one have in the case of an excluded driver accident?

In this scenario, the high school boy being injured severely by Uncle Jack hopefully has some sort of uninsured/underinsured motorist insurance coverage.

This is great to have in a case such as this when because the driver was excluded from the owner’s policy and the insurance company will not cover the the insurance claim.

If the high school boy has also collision and comprehensive insurance for his own vehicle, this covers the damages to his vehicle.

He may then try to get reimbursement from the driver (Uncle Jack) and the owner of the car (you) if you were aware of the excluded driver using your vehicle.

Some states are a no-fault insurance states and make all drivers have at least a minimum amount of bodily and damage insurance to cover an accident no matter who is at fault.

In this instance, each driver’s car insurance covers their damage.

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What if the high school boy only has liability insurance, what can he do?

If Uncle Jack is an excluded driver, and the boy’s car only has liability coverage, then he will have to pay for any medical bills and repairs to the car out of his own pocket.

He and his parents can hire a lawyer and go after Uncle Jack and you for all the medical and motor vehicle damages.

But, if Uncle Jack took your car without permission, and Uncle Jack is a derelict, then the boy and his family may be out of luck.

If the boy and his family wanted to go a perhaps easier route, they could try to go after Uncle Jack in small claims court; but again, if Uncle Jack is insolvent this may not turn out well either, financially.

It’s important when purchasing insurance that you think about the multitude of scenarios you may be in and weigh your options on what you can afford in regards to insurance premium payments, and possible future outcomes if you don’t have enough car insurance coverage.

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