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Named Driver Exclusion Law Now in Effect in Texas

Last year the Texas House of Representatives passed a named driver exclusion bill. A previous article of the House’s bill can be found here. After some natural wrangling of the bill in the Texas Senate, Texans now have a final version of the bill. Section 1952.0545 of Texas Insurance Code is effective as of September 1, 2013, and equates to added coverage regarding driver exclusions in Texas liability auto insurance policies for drivers and injured people.

By way of brief background, Texas insurance companies were historically allowed to sneak in driver exclusions in their lengthy liability policies. That is, the insurance policy could exclude any driver from coverage and render the insurance policy inapplicable when the insurance policy did not specifically name the driver involved in the automobile wreck. The policy would give minimal notice that that coverage did not apply to non-named drivers. Such policies were and remain common in cheaper, low-rate insurance policies.

Now, the insurance code requires that the insurance agent or company disclose verbally and in writing to the applicant or insured the following clear statement:


No longer can insurance companies get away with excluding household drivers without clearly and concisely notifying the insured policyholder. Not to sound too cynical about certain cut-rate insurance companies, but couldn’t some insurance companies concoct a story that they did warn the insured both verbally and in writing? Sure, but this is a lot harder to do so under the new law. Before the insurance agent or company can accept a premium payment it “must receive a copy of the disclosure described by Subsection (b) that is signed by the applicant or insured.” See Section 1952.0545 (c) of the Texas Insurance Code.

Drivers or passengers who are injured by another’s negligence are better protected because of this law. Injured victims in automobile collisions can and should make a liability claim against a faulty driver. All too often in the past, the insurance company would deny coverage because the driver was not mentioned or “excluded” under the policy. If the insurance company cannot provide written acknowledgment by the insured that it properly warned the insured in compliance with Texas law, then the company is precluded from denying liability coverage.

Of course, many car insurance companies are not going to comply with the new law and continue to deny coverage. The injured victim should retain an experienced Texas car wreck lawyer to handle his or her claim from the outset of the process. Such legal representation will help ensure the insurance adjuster does not play games or improperly handle the claim based on a driver exclusion. A skilled attorney can help hold insurance companies to the newly enacted law. Insurance adjusters are folks with jobs and busy lives and may not be aware of this new law. An auto accident victim needs to exercise these rights and protections found in this legislation when dealing with the faulty driver’s insurance company.

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