Named Driver Exclusions in Auto Insurance
Because motor vehicles are often operated by residents of a named insured’s household other than the insured himself or herself, the driving records of such household members may create difficulties for the insured in obtaining auto insurance coverage for a car or truck. Named driver exclusions in motor vehicle insurance policies have been devised as a means of resolving this difficulty.
A named driver exclusion in a policy of auto insurance is a provision by which an insurer and insured agree that coverage under the policy will not be provided while the insured vehicle is being operated by a specifically named person. The validity of named driver exclusions, while often upheld because such exclusions make it possible to obtain coverage for a car or truck that could not be insured in the absence of such a policy provision, has to be judged against the statutory requirements and public policy of the state where the vehicle is insured. Legal issues arising from the use of named driver exclusions include such matters as their applicability in situations involving underinsured or uninsured motorist coverage under a policy, limitations on their application in light of state requirements for minimum amounts of insurance coverage, and their applicability in cases involving no-fault insurance coverage.
The business of insurance in the United States, including that of motor vehicle insurance, has traditionally been governed by the separate law of each state rather than by a single unified body of federal law. As a result, the answers to questions concerning the validity and application of named driver exclusions in auto insurance policies will vary from state to state, and will be found in the state statutes regulating the business of insurance and in the decisions of courts dealing with issues of insurance law.