What is a named driver policy, and should you avoid one?
A named driver policy covers only the people listed on it by name. Anyone else who drives your car is not covered, and the bill lands on you.
- A named driver policy covers only the people printed on it by name, and anyone else who drives that car has no coverage.
- Texas lets companies sell them, but the restriction has to be in writing and you have to sign an acknowledgment.
- To check which kind you own, look for the words named driver on your declarations page, or ask whether permissive users are covered.
A named driver policy covers only the drivers listed on it by name. Anyone else who drives the car, a spouse, a relative, a friend, has no coverage. If more than one person in your house ever drives it, stay away from this kind of policy.
These policies are legal in Texas, as long as the company discloses the restriction. They sit at the low cost end of the market, including for drivers buying with a matrícula consular or a foreign license.
A named driver policy compared with a standard policy
A standard auto policy covers the named insured, the person who bought it. It also covers family members who live in the home, and permissive users, meaning anyone you let drive the car.
A named driver policy takes those last two groups out. It covers the names printed on the declarations page, the front page that lists who and what is covered, and nobody else.
Where it goes wrong
These are ordinary days, and in each one the policy pays nothing.
- Your car is in the shop, your spouse takes yours, and hits someone. No coverage.
- Your adult son borrows it for the weekend. No coverage.
- Your sister drives you home from a medical appointment. No coverage.
- Someone moves in and starts driving the car, and nobody updates the policy. No coverage.
In each case the damage you did to the other driver is yours to pay yourself. Your own car does not get repaired either.
Texas requires disclosure
A company selling one of these policies in Texas has to tell you about the restriction clearly. The disclosure has to be in writing, and you have to sign an acknowledgment, so check your file if you do not remember signing one.
If you are not sure which kind you have, look for the words named driver on the declarations page. You can also call the company and ask whether permissive users are covered.
Why anyone buys one
The bill is lower, because the company is covering fewer people. Someone who lives alone and truly is the only driver has less at stake. A house with three drivers and one car has a gap waiting to open.
The restriction is not a technicality. If a driver who is not listed crashes your car, the company owes nothing and the whole bill is yours.
What to do instead
- Put every licensed driver in the household on a standard policy. Adding a teenager is the usual reason people call, so see adding a teen driver.
- If one person truly never drives the car and has a bad record, ask about a driver exclusion instead. That is a signed form naming that one person, not a blanket restriction on everyone else.
- Ask us to price a standard policy for your whole household, then compare the two before you sign anything.
Check your policy with us
Bring your declarations page and we will tell you in about two minutes which kind of policy you own, and who is covered under it. Call our McAllen office at (956) 687 3334, or use the ZIP form on this page. Se habla español.
Common follow-up questions
Is a named driver policy legal in Texas?
Yes, as long as the company discloses the restriction. It meets the state financial responsibility rule, which says you must be able to pay for damage you cause, for the drivers listed on it.
Will a lender accept a named driver policy?
Often not, and some rental and employment situations will not take one either. If your car is financed, read what the loan requires.
Can I add a driver later?
Yes, and do it the day their situation changes. Coverage does not reach back to a crash that already happened.
Need a quote?
Enter your ZIP code to get started. Ten questions, about two minutes.
Or call (956) 687 3334, Monday to Friday, 9 AM to 6 PM.
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Gerino Alejos
Licensed insurance agent · License 3128710 · NPN 18243381
Owner of McAllen Insurance Group, an independent agency on North 10th Street in McAllen. Works with clients across Hidalgo, Cameron and Starr counties on Medicare, Marketplace health, life and auto coverage. Se habla español.