fbpx

Is My Car Insurance Valid if I Lend My Car to Someone Else in Australia?

Lending your car? Discover the potential effects on your insurance coverage in Australia with Savvy's informative guide.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 16th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner - Smiling woman receives the keys to a car from someone else

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.

Can I let someone else drive my 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.

Does it cost more to add drivers to my policy?

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.

What happens if an unlisted driver has an accident in my car?

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.

Helpful guides on car insurance

Car Insurance Banner - Businesswoman looking at her phone while standing outside her car.

How to Change Car Insurance

Find out how to change your car insurance provider and what factors to consider with Savvy. Choosing the right car...

Car Insurance Banner - Couple driving in an open-top car, happy about receiving a no-claim bonus on their car insurance.

No-Claim Bonus in Car Insurance

Find out more about no-claim bonuses and how they can benefit your car insurance policy right here with Savvy. Looking...

Car Insurance Banner - A young couple sitting in their car checking their car insurance policy on a tablet.

How to Check Car Insurance

Learn about how to check your CTP insurance and other types of car insurance with Savvy. In Australia, car insurance...

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.

Disclaimer:

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.

Car Insurance Banner - Smiling woman receives the keys to a car from someone else

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.