The Financial Services Commission of Ontario (FSCO) is has clarified the use of an endorsement which can be added to your insurance policy.
The Excluded Driver Endorsement (Ontario Policy Change Form, OPCF 28A) has been available but not usually offered, by insurance companies. Effective for policies issued or renewed on or after June 1, FSCO has mandated that insurance companies must offer this endorsement, that it is no longer optional.
The Insurance Act states that the named insured (policy owner) may sign an endorsement which effectively excludes any driver from their insurance policy.
The owner and excluded driver sign a standardized form, which states both agree the excluded driver will not be driving their vehicle. Both owner and excluded driver acknowledge that the insurance policy will not pay for property damage, damage to the auto, or for most injuries caused by an excluded driver.
The endorsement specifically states that the owner and the excluded driver may be held personally responsible for damage or injuries caused while the excluded driver drives the automobile.
It also specifically states that if the excluded driver is caught driving the automobile, he can be charged with driving without insurance. The consequences are also stated that if the excluded driver drives the automobile, the insurance company has the right to cancel the policy. This would make getting insurance very costly, with limited markets.
This endorsement has been on the books for many years, but many insurance companies have refused to offer it, as the wording was not clear and insurance companies ended up paying for some injury claims caused by excluded drivers.
The endorsement has been re-worded by FSCO and the penalties laid out clearly in the document and as a result of this clarity, the endorsement must be offered by all standard insurance companies.
By signing the endorsement, the insurance premium is almost always reduced, as there has usually been a cost involved for keeping this driver on your policy. It is important to note however, that any accidents which the now-excluded driver incurred previously, still can be charged for, by the insurance company. The only cost saving is the premium charged for the excluded driver and his convictions.
