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What is a named insured driver?

Fact-checked with HomeInsurance.com

Everyone has different driving habits and poses their own risk behind the wheel, so car insurance companies are particular on who they want to cover. 

Insurance providers often seek to limit risk by limiting the drivers included in a policy. The drivers who are included, or named, in an insurance policy are called named insured drivers. 

Named insured drivers control the insurance policy. These drivers are also the only ones who will be covered in an accident. So if you let someone borrow your car who is not on the policy, you could be in trouble if they get in a wreck. 

We’ll walk through how to tell if a driver is named in the policy versus an additional insured and the difference between a named driver policy and a standard auto insurance policy. 

What is a named driver policy?

Standard car insurance policies usually come with some form of permissive use, which means unnamed drivers have some protection under your policy while driving your car. 

In a named driver policy, or a named operator policy, only drivers explicitly named in the policy are covered. If someone else who is not listed on your policy drives your vehicle, they will not be covered, and neither will your car. 

There is usually a limit on the number of named drivers who can be added to a single policy. Check with your insurer to see how many named drivers are allowed on your auto insurance. 

If you’re planning on letting an unnamed driver borrow your car, then it’s a good idea to read up on how your insurance policy handles permissive use.

Additional drivers versus named insured drivers

Additional drivers, or authorized drivers, are different from named insured drivers. Additional drivers are insured on the policy and will have coverage when driving a vehicle, but they won’t receive a payout in their name in the event of an accident. This check would go to the named insured, the policyholder. 

Do you have to be listed as a driver on the insurance to be an additional driver? Yes. An additional driver must be listed on the insurance policy, but the policy may not provide them the same coverage as it would for a named insured driver. 

Can the car be registered and insured in different names? Sometimes. If your vehicle is registered in your name, you can still be listed as an additional driver and insured on someone else’s policy.

The limits of the policy coverage for additional drivers will depend on the insurance company. However, additional drivers are only covered if they are driving the car listed in the policy. In all other cases, additional drivers would have no protection. For coverage while driving cars unlisted in the insurance policy, you’ll need non-owner car insurance.

It’s important to note that insurance companies usually don’t want spouses to be listed as additional drivers. If you get married, the insurance company will probably want both of you to be listed as named drivers in the policy.

Let’s run through a few examples to see how coverage commonly works for additional drivers versus how it works for named insured drivers. 

  • Example 1 – You’re driving a rental car and get into a car wreck. If you’re a named insured driver with a policy, your coverage will extend to the rental car. If you’re an additional driver, the policy will not cover you. 
  • Example 2 – You borrow a friend’s car and get into a car wreck that’s your fault. If you’re a named insured driver, you will have liability protection to cover the other driver’s expenses. If you are an additional driver on a policy and drive a car not listed on that policy, you will have no protection under the policy, regardless of whose car you’re driving.
  • Example 3 – A family member who lives with you borrows your car and gets in a wreck. If the family member was listed as an additional driver for your car in your policy, then they will have limited coverage. If the family member was not listed as an additional driver, your insurer will not involve themselves in the situation, and the family member is left unprotected.

Should you get a named driver policy?

Insurance companies love knowing who will be driving the cars listed in an insurance policy, so you might be able to save money on the premium if you sign up for a named driver policy. However, it’s always good to shop around and get a few different quotes from insurers. 

If you are confident no one else will be driving your car besides drivers named in the policy, a named driver policy means you could save on car insurance. But due to the significant restrictions on drivers, it’s a good idea to think ahead before signing up for a policy.

Although named driver policies are less common than standard policies with permissive use, you should find a provider who offers a named driver policy without too much trouble. Driving is expensive, so the extra research is worth the trouble.

ProsCons
The insurance premium is usually less expensive.
Only drivers explicitly named in the policy will be covered.
It’s easy to understand which drivers are covered—only the drivers who are named in the policy. Understanding which drivers are covered in the policy and the limits of that coverage can be difficult.

The takeaway

  • A named insured driver is explicitly listed in the policy.
  • Occasional drivers are not allowed in named driver policies.
  • Additional drivers have fewer protections than named insured drivers in a policy.
  • Named driver policies could cost less than standard policies due to the reduced risk.

To be a named insured driver, you must be listed in the policy. Usually, a named insured driver is also the policyholder. Some may ask, “does the insurance have to be in the name of the owner?” If a person is a named insured driver, then they will usually have ownership of the policy.

Car insurance rules are complicated, and it’s easy to get turned around. When signing up for a new policy, we recommend reading the exclusions first. That way nothing sneaks up on you if a friend or family member asks to borrow the car.

Julian Dossett

Julian is a freelance writer for Coverage.com, where he writes about auto and home insurance with an eye toward consumer advocacy. His work has appeared at The Simple Dollar, Bankrate, Reviews.com, Blockchain Beach and MSN.com. He’s currently based in New Mexico.

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