Texas Bills Attempts to Prohibit or Restrict Named Driver Exclusions

25 Feb Texas Bills Attempts to Prohibit or Restrict Named Driver Exclusions

Insurance companies are always seeking ways to legally deny the payment of valid claims, and the use of “named driver” policies in Texas is so rampant that lawmakers are now looking to put and end to this unscrupulous practice.

In an effort to reduce or eliminate the number of named driver policies in our state, the Texas Legislature has filed two bills: one seeks to prohibit the practice and the other seeks to only allow it under certain circumstances.

Overview of Legislative Action

There are two bills filed in the Texas Legislature in order to prevent insurance companies from legally issuing “named driver” policies in the state. While I strongly believe that named driver policies should be done away with altogether, the 2nd bill acts as a 2nd option of sorts and allows this exclusion only under certain circumstances, which sometimes encompasses impaired drivers.. It is best to get lawyer for defending you against a DWI, from here. Hiring a dui defense lawyer or a criminal defense lawyer is your best bet, since they will have plenty of experience defending impaired drivers that are involved in a vehicle collision.

Both Texas H.B. 318 and Texas H.B. 335 would add Subchapter H to Chapter 1952 of the Insurance Code in order to address policies that that include “named driver” clauses. Both bills define the practice of only providing coverage for drivers that are specifically named in the policy instead of those who reside in the household of an insured individual. Normally, car insurance follows the car, not the individual. Named driver exclusions are used to limiting coverage to individuals that are specifically named in the policy. But seeking lawyer’s help after a OUI arrest at earliest stage can protect the offender to defend the malicious case against them.

The problem with named driver policies are that insurance companies push these exclusions onto consumers who do not fully understand the implications. What happens when a family member takes the car without permission? What if you’re teaching your teen to drive and an accident occurrs? What if you loan the car to a friend, or a sober friend drives you home after a night of drinking? Well, the insurance company gets to say “we’re not paying for anything,” leaving the victims of an accident without recourse. For these instances, it is highly recommended to consult a dui lawyer to get legal assistance.

The issue of car accidents involving uninsured drivers is getting out of hand in Texas. These bills seek to reverse the damage done by the issuance of named driver policies in Texas since they were allowed in 2013.

Terms of the Bill

While both measures would prevent insurance companies from issuing most named driver policies in the state, HB 335 would allow insurance companies to issue named driver exclusions provided the exclusion was for specific named individuals and not an entire class of drivers.

If the bills become law, it would affect policies that are written or renewed on or after January 1, 2016. The effective date for both of the bills is September 1, 2015. There was a previous bill that was similar in nature—HB 1773—but it failed to pass the 2013 regular Legislative session.

Rules of Disclosure

Even though the Legislature allowed the use of named driver policies in 2013, it also passed legislation that required insurers to inform policyholders of the limitations of these types of policies.

Texas Legislature passed Senate Bill 1567 in the 2013. During the Regular Session they created §1952.0545 of the insurance code that would require both insurers and their agents provide consumers with both written and oral disclosures (as well as contemporary written confirmation of all oral disclosures) for any policies that included named driver exclusions. In May of 2014, the insurance commissioner added additional amendments that required all disclosures be visible on auto insurance I.D. cards.

The most recent action by the insurance commissioner added §5.208, a measure intended to clarify the responsibilities of insurers and agents regarding disclosures and the issuances of named driver policies for both new consumers and policy renewals.

The provisions of the new bills include a number of rules and recommendations, but the most important one is the agent or insurance company must meet the disclosure requirements before accepting any payments for premiums for new or existing policies.