Many people have been trying to save a little money on their auto insurance by purchasing policies that only cover one individual driver rather than offering coverage for an entire household. These “named driver” policies are appealing because they tend to be very cheap, but the fact that they only cover one individual has resulted in problems. Most vehicles are driven by more than one member of a household, which means that sometimes drivers who are not protected by the named driver policy get into accidents. That is especially common when there are members of the household that do not realize that the cheap car insurance Texas policy only covers one driver. That can be a significant problem not only for the driver himself, who will not have an insurance company’s help to repair or replace his damaged car, but also for everybody else involved in the accident.
Named driver policies can be contrasted with liability insurance, which is the most popular type of auto insurance in Texas. Liability insurance covers a vehicle rather than a driver, so the policy works the same way regardless of who happens to be driving the car during an accident. Most insurance companies in Texas offer liability policies, but most of the larger companies refuse to sell named driver policies.
The Texan House of Representatives voted to ban the named driver policies completely, but the Texan Senate did not allow the bill to get out of the committee stage. Instead, the Senate passed a bill written by Wendy Davis, who represents Fort Worth in the Senate, which increased government oversight and regulation of named driver policies but did not completely ban that type of auto insurance. The limits to a named driver policy must be clearly listed on the insurance ID form. Furthermore, insurance companies are now obligated to inform policyholders that only a single driver is protected by the policy. They must provide the information both orally and in writing. Finally, the bill forbids insurance companies from selling policies which do not meet the minimum coverage requirements set by Texas state law.
One advantage to the new law is that policy officers will be able to quickly and easily determine if a driver has proper insurance coverage or not simply by looking at the driver’s insurance documents. Previously, a policy officer would not know if a given driver was protected by a car’s auto insurance policy without performing extensive research. Now that the limits of the coverage need to be clearly printed on all of the documentation, the police officers of Texas will have a much easier time doing their jobs.
Named driver policies remain an unpopular form of auto insurance with the legislature of Texas. Many legislators are preparing to continue efforts to ban the auto insurance policies during the next legislative session. At the same time, they are teaming up with members of the insurance industry to make sure that people are educated about the benefits and limitations of this variety of auto insurance (website).