Excluded Driver In A Policy

Almost all auto policies will have a form to fill out called a 515A.  This form when filled out and signed excludes named drivers from any coverage while they are operating the otherwise insured vehicle.

This topic was discussed in a declaratory judgement opinion from the Dallas Court of Appeals styled, John Dempsey v. ACCC Insurance Company.

ACCC sought to have the Court declare that ACCC had no liability under a policy of insurance issued to Sherman Clifton.  Shashana Clifton was an excluded driver under the policy.  All the paperwork making the exclusion binding was properly completed.

Shashana drove the covered vehicle into the back of another vehicle and a lawsuit resulted.  ACCC provided a defense on the personal injury claim made by the driver of the other car and paid for $650.00 of property damage to the other vehicle.  A judgment was taken against Shashana for $36,354.79.

The trial court granted ACCC’s motion for summary judgment in this declaratory judgment action.  Dempsey appeals two issues:

1. The trial court erred in granting the defendant’s traditional motion for summary judgment because the plaintiff had waived the excluded driver provision relating to Shashana Clifton.
2. The trial court erred in granting the defendant’s traditional motion for summary judgment because the plaintiff was estopped to assert the excluded driver provision relating to Shashana Clifton.
The record shows Dempsey was not, nor was he ever insured under the ACCC policy.  The policy was issued to Sherman Clifton and it specifically excluded any coverage under the policy for Shashana.
The fact that an ACCC adjuster may have inspected Dempsey’s truck and prepared an estimate of the loss, issued a check for the loss and negotiated with Dempsey’s attorney in an effort to reach a settlement cannot be used to create coverage under the policy.  Dempsey’s waiver and estoppel argument is foreclosed because Texas law is clear that the doctrines of waiver and estoppel cannot be used to re-write the contract of insurance and provide contractual coverage for risks not insured.  As explained by the Texas Supreme Court:
Waiver and estoppel may operate to avoid a forfeiture of a policy, but they have consistently been denied operative force to change, re-write and enlarge the risks
covered by a policy.  In other words, waiver and estoppel cannot create a new and different contract with respect to risks covered by the policy.
Therefore, ACCC’s judgment is affirmed.