Are unlicensed drivers covered by insurance?

Auto insurance is essential, both for the driver’s sake and for the protection of accident victims. But coverage terms can vary from one policy to the next.

In general, an active policy will cover all drivers, even if they’re unlicensed. There are exceptions to this rule, however. For example, some policies have built-in exclusion clauses that limit coverage to specific individuals.

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It’s always a good idea to direct these types of questions to your insurance company, as laws and policies vary from one state to the next. Making hasty conclusions can come back to haunt you in the end.

Excluding drivers from coverage

Auto insurance companies make money by charging premiums. In exchange, they agree to cover a set amount of costs, should the vehicle be involved in a wreck, theft, or another qualifying incident.

Auto accidents cause a great deal of harm— both to the passengers as well as to property. To minimize the costs of paying claims, auto insurance companies either charge bad drivers higher rates or deny them coverage altogether.

But this can create a problem in situations where multiple people share the same vehicle. For example, the owner of the car may enjoy a perfect driving record, while other members of the household may have points on their record or lack a license altogether.

For this reason, most policies extend coverage to “permissible” parties, i.e., those who drive the vehicle with the policy holder’s permission. But this can push the cost of premiums upward, as the insurer can never be certain that the person operating the vehicle is trustworthy.

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To keep premiums affordable, many states allow insurers to offer exclusion clauses. This means that the policy will not cover certain individuals, whether or not they have a license.

For example, let’s say you own a car and have a good driving record. But your partner’s license was suspended last year due to multiple ticket violations. Your insurer might give you a discount on your premium if your partner is excluded from the policy.

While this can save you a few bucks, it also means that your partner will not be covered, should he or she wreck the vehicle, or harm someone else while using it.

For this reason, you should think long and hard before agreeing to an exclusion clause. Your agent can give you more information.

Other considerations

Not everyone who owns an automobile needs a driver’s license, as strange as that may sound. For example, let’s say that the vehicle’s owner is ineligible for a license, either due to medical conditions or advanced age.

In such cases, the owner may hire a licensed motorist to drive him or her around. This requires a special type of coverage geared to the situation. An insurance agent can provide the details.

What if an unlicensed driver steals your vehicle and ends up in a wreck? In such a case, coverage limitations may apply. If this causes you concern, then you may want to talk to your agent about adding a rider to your policy that covers this scenario.

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Proving that someone stole your vehicle can be problematic, especially if the person is a member of your household. For example, let’s say you have a son who lives with you. You’ve told him that he is never to use your car, but he does so anyway, totaling it in the process.

Your insurance company will probably cover the claim. But it will also raise your rates as a result of the wreck. This is one situation in which the excluded driver option we mentioned earlier may come in handy.

Insurance companies vary in terms of their commitment to contractual obligations. If you believe that an insurer is trying to evade its legal responsibilities, then talk to an attorney right away.

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Please remember that the information in this post is intended as an introduction to the topic, not to provide specific advice. Talk to one of our New York City car accident lawyers or insurance agent before making decisions about automobile coverage. At Douglas and London, we’ve secured millions for our injured clients—when third party negligence is to blame, and we are here to help you every step of the way.