A named driver policy is no longer legal in Texas. Since January 1, 2020, insurers cannot deliver, issue, or renew an auto policy that covers only the drivers listed by name while leaving other household members with permission to drive uncovered. Texas still allows a narrower tool called a named driver exclusion, which removes one specific person from an otherwise standard policy. The distinction matters, because assuming you have the old kind of coverage when you don’t is how people end up personally paying for an accident.
Why Texas Banned Named Driver Policies
The state tried to fix the problem with disclosure first. In 2013, SB 1567 required insurers to explain, in writing and out loud, that household members not listed on a named driver policy would have no coverage. The declarations page had to carry the disclosure and the applicant had to sign it.
Drivers still found out they were uncovered only after a crash, when claims for unlisted household members were denied. In 2019, the Legislature passed House Bill 259, adding Subchapter H to Chapter 1952 of the Insurance Code. Section 1952.353 prohibits insurers from delivering, issuing, or renewing a named driver policy.1State of Texas. Texas Insurance Code 1952.353 – Named Driver Policies Prohibited; Certain Named Driver Exclusions Authorized The Texas Department of Insurance confirmed the prohibition applied to all policies delivered, issued, or renewed on or after January 1, 2020.2Texas Department of Insurance. Commissioner’s Bulletin B-0010-19
One product the ban does not touch is the operator’s policy, which covers a named insured who does not own a vehicle. If you don’t own a car but sometimes drive borrowed or rented ones, an operator’s policy can cover your liability. It works differently from the old named driver policies because it only covers you operating vehicles you don’t own, not a family car sitting in the driveway that a spouse or teenager might drive.
Named Driver Exclusions Are Still Allowed
Although whole named driver policies are gone, a named driver exclusion endorsement on a standard auto policy is still legal. The exclusion removes one specific person from your coverage, and it’s typically used when a household member has a driving record bad enough to spike the premium if they were rated on the policy.
Texas law puts two limits on how an insurer can use these exclusions. First, each excluded driver must be named individually. Broad-category exclusions, like “all drivers under 25,” are not permitted. Second, the named insured must accept the exclusion in writing.1State of Texas. Texas Insurance Code 1952.353 – Named Driver Policies Prohibited; Certain Named Driver Exclusions Authorized The signature has to be original or electronic, executed specifically for each new or renewal policy.3Texas Department of Insurance. 28 TAC 5.208 – Disclosures for Named Driver Automobile Insurance Policies
The practical result: a Texas auto policy today covers every household member with permission to drive your car, unless a specific person has been individually excluded by name with your written consent.
What Happens If an Excluded Driver Crashes Your Car
If someone you’ve excluded takes your car and causes an accident, your insurer will deny the claim. That holds regardless of the circumstances. The exclusion applies even if you gave the person permission and even in an emergency. Texas courts have upheld these exclusions when the policy language is clear and the endorsement was signed.4Justia. Garza v. State Farm Mut. Auto. Ins. Co., 208 F. Supp. 2d 693
The financial exposure is severe. You would be personally responsible for the other driver’s medical bills, vehicle repairs, and other damages. The excluded driver could also face personal liability. Before signing an exclusion, think honestly about whether that person might ever end up behind the wheel of your car.
When an Exclusion Actually Helps You
Exclusions aren’t only about premiums. Under Texas cancellation rules, after the first 60 days of a policy an insurer can cancel mid-term for a limited set of reasons, including a suspended or revoked driver’s license held by any driver who lives with you or regularly uses your car.5Texas Department of Insurance. Was Your Auto Insurance Not Renewed or Canceled? If that’s the reason, the insurer cannot cancel you if you agree to exclude that driver by name. In this situation the exclusion is what keeps your policy in force.
The insurer must still give at least 10 days’ notice before any cancellation takes effect.6State of Texas. Texas Insurance Code Chapter 551 – Section 551.104
Minimum Liability Limits You Need to Meet
Starting January 1, 2026, Texas raised its minimum auto liability requirements to $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $40,000 for property damage, written in shorthand as 50/100/40. The previous minimums were 30/60/25. If your policy renews in 2026, confirm the coverage meets the new floor.
These minimums apply to any policy issued in Texas, including standard policies carrying a named driver exclusion and operator’s policies. Carrying only the minimum leaves you exposed if you cause a serious accident, because medical costs from a multi-vehicle collision can quickly exceed $100,000, and any shortfall comes out of your own pocket.
If Your Insurer Denies a Claim or Misrepresents Coverage
If you believe an insurer wrongly denied a claim, canceled without proper notice, or misrepresented what your policy covered, the Texas Department of Insurance accepts consumer complaints against companies, agents, and adjusters.7Texas Department of Insurance. Get Help With an Insurance Complaint TDI can investigate whether the insurer violated state law and impose penalties, though it cannot order the company to pay your claim.
For claims of bad-faith conduct, Texas Insurance Code Section 541.060 prohibits insurers from misrepresenting policy terms, refusing to pay claims without a reasonable investigation, and failing to affirm or deny coverage within a reasonable time.8State of Texas. Texas Insurance Code Chapter 541 – Section 541.060 A court finding of a violation lets the policyholder recover actual damages and attorney’s fees, with additional penalties possible for knowing or intentional misconduct. Mediation and arbitration are also available and tend to resolve faster than a lawsuit.