Excluded Drivers In Texas

February 26, 2010

There are lots of people in the Fort Worth, Dallas, Grand Prairie, Arlington, and Weatherford, areas of Texas who have problems getting affordable insurance. The reasons can be many, examples are, they are young, too many tickets, too many wrecks, a DWI conviction, license suspension issues, and medical conditions.
What happens if you have insurance on your car but when you bought the insurance you signed a document called a "named driver exclusion" on your spouse because the insurance company would not cover her because she suffered from epileptic seizures. That is what happened in the case, Janie Zamora, Pete Zamora, Jesus Toe, and Gracie Vela v. Dairyland County Mutual Insurance Company. This case was decided by the Court of Appeals in Corpus Christi, Texas.
The facts are, on December 2, 1993, Gracie Vela (wife of Jesus Toe) was operating Jesus' automobile when she was involved in an accident with Pete and Janie Zamora. At the time of the accident, Gracie was named as an excluded driver in Toe's policy with Dairyland County Mutual Insurance Company. The Zamora's sued Gracie for her negligence and Jesus for negligently entrusting his car to Gracie. Dairyland denied coverage to Gracie and Jesus based on the named driver exclusion in the policy.
The arguement was that the named driver exclusion should be be held invalid by the Court as being against public policy and in violation of the Texas Motor Safety -- Responsibility Act (the Act). Previous Courts have held a family member exclusion to be invalid.
Here though, the Court drew a distinction between the invalid, "family member exclusion," and the present "named driver exclusion." The Court said there is no analogy between the two.
In a named driver exclusion the policy holder is given an option to exclude from coverage drivers who, by virtue of their driving history or other factors, are deemed high risk drivers. The Court said, by focusing on the risk involved, the named driver exclusion does not contradict the public policy underlying the Act, but instead furthers Texas public policy on two levels.
First, this exclusion furthers public policy by enabling drivers with family members having poor driving records to get insurance they can afford. Second, this exclusion deters insured drivers from entrusting their automobiles to unsafe excluded drivers, thus keeping those unfit drivers off the road.
The Court looked at the policy which read in pertinent part, "You agree that none of the insurance coverage afforded in this policy shall apply while Gracie Toe ... [The Excluded Driver] is operating your covered auto or any other motor vehicle." The Court then said, "The exclusion's purpose is to suspend coverage when a specific person, considered or known to be an unsafe driver, is operating a covered vehicle." Gracie was in fact operating the vehicle covered by the policy of insurance and the Court ruled in favor of Dairyland.