UPDATED: Mar 13, 2020

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Written By: Laura BerryReviewed By: Melanie MussonUPDATED: Mar 13, 2020Fact Checked

Car insurance companies base their rates on information gathered about the vehicle’s owner and any other drivers in the household. The age, gender and driving history of all people with access to a vehicle will play a role in determining the cost of the car insurance.

This means that the policyholder is not the only person whose driving record affects the cost of premiums, and an individual who lives with a high-risk driver may experience a rate increase as a result of it. Fortunately, there are ways to reduce the cost of insurance and prevent bad drivers in your home from increasing the cost of your policy.

Excluded Drivers

Some insurance policies only cover people who are specifically listed as drivers. Most insurance policies, however, will extend to anyone who routinely drives the vehicle or has access to it. This includes everyone in the home including the insured’s spouse and children. If one of those drivers has a DUI or other major mark against their policy, they will cause the rates to increase because the insurance company assumes that they will have access to the vehicle and may drive it.

In order to remove this threat from your policy, you can exclude other drivers from your insurance. This means that those drivers will not have access to your vehicle and that their driving habits will not affect your premiums. It also means that if they get involved in any accidents in the vehicle that the claim will not be covered. You may also be charged with insurance fraud if you willfully allow excluded drivers to operate your vehicle.

If you do choose to exclude your spouse from your policy, be sure that you are the registered owner on the car. If you own the vehicle jointly, you may or may not be able to exclude them from the policy; check with the insurance company to make sure. In some cases, insuring a vehicle that you do not own and excluding the registered owner can cause problems with the insurance company and may lead to a policy cancellation or non-renewal.

What Happens if an Excluded Driver Wrecks a Car?

If the excluded driver does choose to drive a vehicle on the policy, any damage that they cause will not be covered by the auto insurance. The insurance company will deny the claim, and the vehicle’s registered owner will be responsible for paying any damage out of pocket. This could result in substantial lawsuits and may damage the individual’s credit as claims are paid off over time.

Allowing an excluded driver to use your vehicle may also be considered insurance fraud. This will cause your insurance policy to be canceled, and you may have criminal charges levied against you. Once your policy has been canceled for any reason, it can be difficult to get a new policy for an affordable rate. This is especially true for insurance fraud as many companies will not want to take the risk on someone who has committed fraud in the past.

What if an Excluded Driver Needs to Drive?

There is an option available for some households where a single driver’s bad driving history can cause rates to increase for everyone. If that person still has a license and needs to continue driving, their vehicle can be insured on a separate policy while they are excluded from the family’s main policy. This is especially helpful for teenagers when they receive their first car, but it can be used for spouses with a history of DUI or any other family member whose habits cause a rate increase.

Depending on the situation, carrying two separate policies may or may not save you money. If you have a large family policy with several vehicles, a separate policy for the high-risk driver may be the most cost-efficient option. On the other hand, if you only have two vehicles, it may be more affordable to carry both vehicles on the same policy even if one driver is high risk.

Living with a high-risk driver will not affect your driving history, but it will affect the cost of insurance for any vehicle they have access to. If you’re searching for ways to save money on your insurance, you can check with your company to see if there are any ways to reduce the cost of coverage without excluding your husband or other family member. You may also be able to find an affordable high-risk insurance policy with a different carrier by shopping around online.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. Through her years working in th...

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Reviewed by Melanie Musson
Published Insurance Expert Melanie Musson