Excluded Driver

Written by Ziyad Bakkali

Reviewed by Daniel Mirkovic

Updated October 24, 2024 | Published October 24, 2024

Noun

ex·clu·ded dri·ver | ik-ˈsklüdəd ˈdrī-vər

Definition: A person who is specifically not covered by an insurance policy and is prohibited from driving the insured vehicle.

After learning that his daughter’s license was suspended, Jonathan listed her as an excluded driver on his car insurance policy.

The important points

  • An excluded driver is not permitted to drive any vehicle insured under a car insurance policy – even in an emergency. If they do, the policy won’t cover them.

  • Excluding a high-risk driver from a policy can mitigate potential losses for the insurer and lower insurance premiums for the policyholder.

  • If an excluded driver is ever caught driving an insured vehicle, the insurer can deny claims or cancel the policy, potentially resulting in financial liabilities for both the policyholder and the excluded driver.

What is an excluded driver?

An excluded driver is someone specifically listed on a car insurance policy but does not have coverage under it. Once excluded, that driver cannot drive the insured vehicle — ever, even in an emergency.

When you designate someone as an excluded driver, you essentially surrender their right to indemnity. They will not receive payment under the policy (except for the accident benefits they’re entitled to by law) for any losses they cause.

There are several reasons why you might want to exclude a driver from your policy, but most boil down to one simple concept: risk.

Driver exclusions are typically insisted upon when someone is deemed too risky to insure. From an insurer’s standpoint, a person with recent at-fault accidents, a suspended license, or driving convictions (like traffic tickets) is typically considered a high-risk driver. Since insurers use the risk profile of all listed drivers in rating, a high-risk individual can create an unfortunate burden on the policyholder, usually in the form of higher premiums or the policy being ineligible for purchase.

If the policy is still eligible for purchase, you’ll have two options: pay the higher premium or exclude the driver from your policy. The choice usually depends on what your insurer allows.

Ultimately, the insurer also bears the weight of potential claims. So, in certain cases, it might be the insurer that wants the additional exclusion.

When should you exclude a driver?

During the quote process, insurance providers will let you know who is required to be on your policy. You’ll often need to list everyone in your household with a valid driver’s license and any non-household members who drive your car on a regular basis. Understandably, there may be drivers you don’t want insured under your policy — presumably for good reason.

One of those drivers may be a problem driver, for instance. They might have a habit of reckless driving or a poor driving record that’s driving up your rates. Or, maybe you listed someone on your policy who ends up never using your vehicle. Regardless of how often you lend your car, there’s always the possibility that a borrower could crash your car, whether they grabbed your keys with or without permission. That means if they remain on your policy, there will always be an inherent risk of loss to the insurer.

To protect your rates and prevent them from rising further, it might make sense to exclude such household drivers from your policy.

When you request to exclude a driver, you’ll typically need to sign a driver exclusion form first.

Driver exclusion forms

Excluding a driver from an insurance policy is a formal process. The policyholder must notify the insurance company and specifically request the exclusion of the driver in question. If your insurer agrees, you’ll typically need to sign a driver exclusion form, which is usually added to the policy as an endorsement. It must have signatures from both you (the policyholder) and the driver you wish to exclude.

You’ll need to complete a separate exclusion form for each person you plan to exclude from your policy.

Most forms will outline conditions that both the policyholder and excluded driver must agree to. They’ll often stipulate the prohibitions of who may drive the insured vehicle, any limitations of coverage, and at times the potential consequences of violating the terms of the contract.

As insurance is regulated at the provincial level, the practice of excluding drivers can differ from one jurisdiction to another. In Ontario, for example, insurers must offer the excluded driver endorsements. In other provinces, insurers have the option of offering this endorsement. 1

Excluding a driver in Ontario

The excluded driver endorsement is known as OPCF 28A: Excluded Driver in Ontario. Signing this form is like promising the insurer that the excluded driver won’t drive your insured vehicle, and if they do, you could both be held responsible.

OPCF 28A stipulates that when an excluded driver is operating the insured vehicle:

  1. The policy will not provide insurance for that vehicle.
  2. The policy will not provide coverage for any damage or injuries caused by the excluded driver.
  3. The owner of the vehicle and the excluded driver may both be personally liable for damage or injuries caused by the excluded driver.

These exclusions apply to any insured vehicles, temporary substitutes, or newly acquired automobiles. That means If the excluded driver crashes any of those vehicles, your policy won’t pay for the repairs, even if you have collision coverage. Moreover, if that driver is found liable (or at fault), you could get sued by injured victims, and your policy won’t pay for any settlement.

The only coverage an excluded driver has is those accident benefits the law requires to be paid to anyone injured in an automobile accident in Ontario.

There are additional provisions to be aware of. For instance, if the excluded driver is caught driving the insured vehicle (even if it’s an emergency), they may be charged with driving without insurance, which is a serious offense across Canada.

Things get worse when you make a claim — a claim which you had no part in but are now responsible for. The insurer might deny your claim, not renew your policy, or rescind the policy completely on the grounds that the contractual agreement was breached — something known as material misrepresentation. Consequently, the excluded driver and policyholder might both face higher premiums, or even difficulty finding car insurance in the future.

So, how would all of this unfold with your insurer? Consider the following example:

Example

After graduating from university in Vancouver, Andrea decides to return to her Toronto home permanently. Her father, Jacob, owns a 2022 Toyota Prius, which he bought and insured under his name. Since Andrea is now part of the household, he adds her as an additional insured on the policy to let her drive the car.

Two months later, Andrea crashes her dad’s car, and the insurer finds her at fault. She’s now seen as a bigger risk for the insurer to cover, so they increase the rates of the policy under which she’s insured. The premium Jacob was paying prior to Andrea’s accident was significant enough that he can’t afford to pay the new increased rate. He contacts his insurer to initiate a driver exclusion, files the OPCF 28A with Andrea, and removes her from coverage.

Now, if Andrea were to get behind the wheel of her father’s vehicle as an excluded driver, it would be a risk to both herself and the policyholder. There’s no coverage for losses that may arise out of her actions, so Andrea and Jacob may both be liable if she crashes the car again.

How long is a driver excluded from a car insurance policy?

A driver remains excluded until you (or the insurer) choose to have the exclusion removed. However, whether the insurer approves or denies that request will depend on the risk profile of the excluded driver at that time.

In Andrea’s case, she would stay excluded until the policyholder, Jacob, contacts the insurer to reinstate her as a covered driver. In an ideal scenario, Jacob would wait until any at-fault accidents have dropped from her record, just to avoid them interfering with his insurance.

Sources

  1. Davies, Bryan. “Excluded Driver Endorsements (OPCF 28A and O.E.F. 78A).” Financial Services Commission of Ontario, 18 Oct. 2024, www.fsrao.ca/media/7336/download.

Looking for another insurance definition? Look it up in The Insurance Glossary, home to dozens of easy-to-follow definitions for the most common insurance terms. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.

About the expert: Daniel Mirkovic

A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.

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