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Lending your car? Discover the potential effects on your insurance coverage in Australia with Savvy's informative guide.
Fact checked
As a car owner in Australia, you may find yourself in situations where you need to lend your car to someone else, whether that’s a family member, friend or colleague. However, it’s essential to understand how this could impact your car insurance coverage. This useful guide explores the implications of letting someone else drive your car, the importance of listing regular drivers and what happens if an unlisted driver has an accident in your car.
In Australia you can usually let anyone drive your car as long as they have a valid driving licence, even if they aren’t listed on your car insurance policy. However, if the person regularly drives your car and is not listed on your insurance policy, you risk potential coverage issues in the event of an accident. A common exception is learner drivers, who are often covered as standard without needing to be listed on the policy as an additional driver. Regardless of who you are lending your car to, you should check your insurance documents before letting them get behind the wheel to understand what sort of cover is provided and any requirements or limitations.
Adding additional drivers to your car insurance policy may result in higher premiums. Insurers assess risk based on the listed drivers and their driving history, so adding someone with a bad driving record may push up the cost of your insurance. If you add a young or inexperienced driver, such as someone under 25, you may face increased costs due to the higher perceived risk associated with these drivers. However, you will likely face even higher excess costs if they are unlisted and have an accident while driving your car.
Many insurers make it easy to add and remove additional drivers on your policy, so specifying anyone who drives your car frequently will provide peace of mind that you are covered in the case of an incident.
If an unlisted driver has an accident while driving your car, the situation can become complicated. Some insurance policies may provide coverage in such cases, but it might come at the cost of an unlisted driver excess payment. This means that if an unlisted driver is involved in an accident while driving your car, you'll have to pay an additional excess on top of your standard excess.
Moreover, an additional age-based excess might apply if the unlisted driver is under 25 years old. Younger and inexperienced drivers are statistically at higher risk of accidents, and insurers adjust their premiums accordingly.
In other cases, your insurer may refuse to cover any claims involving unlisted drivers, leaving you personally liable for the damages or injuries caused, so it is important to check your product disclosure statement (PDS) before letting anyone borrow your car.
Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.
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Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.
Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.