Excluded Drivers & Included Drivers: Who Needs to be Listed on your Auto Insurance Policy?

Who lives in your house?  Family members, extended family members, roommates, a friend or two?  An auto policy, as a rule, provides coverage to the named insured and all other drivers who live in the same household. To enable an insurance company to assess its risk, it will typically request information (on the application) on all the drivers residing in that household, whether they drive your vehicle or not.

Other drivers living in the household impact the insurer’s underwriting evaluation. The insurer needs to know how the vehicle to be insured will be used before deciding to issue a policy. For example, if a driver in the household has a poor driving record, the insurer may not want to issue the policy or will only issue the policy with an increased premium. As discussed further below, the insurer may also offer to issue the policy with a “named driver exclusion,” which excludes coverage if a particular risky driver in the household uses the vehicle. Whether this driver owns and insures his own vehicle may also impact the insurers’ risk evaluation

It is common for all household members of driving age to be listed to protect both the named insured and the insurance company providing coverage. This does get into a sticky area in auto insurance, however, where some states and some companies differ; some require all drivers in the household to be listed on the policy and others do not.  I’ll address it very generally here, but advise you to consult with your insurance agent for specific information about your household situation and the requirements that apply.

An individual, whether related to you or not (such as a roommate), who resides in your household, may be required to be listed on your auto insurance policy depending upon your insurer's underwriting guidelines. In some states, exclusions are available for both family residents and other household members who do not drive your vehicle and, therefore, do not require coverage.  The insurance company has the right to ask about all licensed household members since typically state laws allow the insurance company to gather information that effects any costs that may arise from the actions of any household member. Thus, they want to know about all these people so they can properly assess their risk and calculate your rates based on this (as well as other) rating factors.

The best advice I can give you is that even if one (or more) of the drivers in your household never drives one (or more) of your cars, you should still put them down as an occasional driver and not exclude them in an effort to save on the premium. Why? If the excluded individual drives your car one time, even just to the corner store, and has an accident, this may, at best, slow the claims process, but, at worst, it may result in a denial of auto insurance coverage under your policy. This is true even if that individual has his or her own automobile.  If your roommate, for example, was driving your car and caused an accident, the other driver may sue you because you own the vehicle that caused the collision.  If your roommate was excluded from your policy, your insurance company may deny the claim and refuse to cover the damages. Better safe than sorry.