What Happens If Someone Else Crashes Your Car?
In a Nutshell: If someone else crashes your car with your permission, your insurance policy is the primary cover — not theirs. You'll pay your excess, and your premium may increase. The person driving is typically covered under your policy if they were listed as a named driver (or if your policy covers "any driver"). If they aren't covered, your insurer may still pay — but then pursue them for the cost.
Whose Insurance Applies?
| Scenario | Policy That Pays | Excess Paid By | Premium Impact |
|---|---|---|---|
| Named driver crashes your car | ✅ Your policy | You (your excess) | Your premium increases |
| Any driver crashes your car (covered by policy) | ✅ Your policy | You (your excess) | Your premium increases |
| Unlisted driver crashes your car | ✅ Your policy (usually) | You (may be higher excess) | Your premium increases |
| Driver crashes their own car | ✅ Their policy | Their excess | Their premium increases |
| Unlicensed driver crashes your car | ❌ Claim likely denied | You — full repair costs | You lose NCB and may be cancelled |
Named Drivers vs Any Driver Policies
| Policy Type | Who Can Drive | What Happens in a Crash |
|---|---|---|
| Named driver policy | Only people listed on the policy | ✅ If they're listed — covered under your policy |
| Any driver policy | Anyone with a valid licence | ✅ Covered under your policy — no need to list them |
| "Occasional driver" cover | Some insurers cover occasional drivers | ⚠️ Check if it covers occasional vs regular use |
💡 Tip: Most comprehensive policies in Australia are "named driver" policies. If your friend regularly drives your car, add them as a named driver to avoid claim complications.
Can the Other Person's Insurance Be Used?
| Scenario | Can You Claim on THEIR Policy? |
|---|---|
| They borrowed your car with permission | ❌ No — your policy is primary |
| They stole your car | ✅ Yes — theft claim on your policy (not theirs) |
| They had permission but were unlicensed | ❌ Your claim may be denied — you allowed an unlicensed driver |
| They had permission and their own insurance | ✅ Your policy pays first — their policy may cover any excess or additional costs (if they have cover for driving other cars) |
⚠️ Note: Some policies include "driving other cars" cover — but for third party only, and usually only for cars not owned by the driver. It rarely applies to a borrowed car that crashed.
What If the Driver Is Not Covered?
| Situation | What Happens |
|---|---|
| Driver not listed on your named driver policy | Insurer may still pay (goodwill) — then they'll pursue the driver for costs |
| Driver excluded by name on your policy | ❌ Claim denied — you're personally liable |
| Driver is unlicensed | ❌ Claim denied — you're liable for allowing an unlicensed driver |
| Driver was under the influence | ❌ Claim denied — you may lose coverage |
| You didn't give permission (theft) | ✅ Claim covered (theft claim — you pay excess) |
How Your Premium Is Affected
| Scenario | Your Premium | Other Driver's Premium |
|---|---|---|
| Named driver crashes your car | ✅ Increases (they don't have their own claim) | ❌ Unaffected |
| Friend crashes your car (not listed) | ✅ Increases | ⚠️ May increase — the insurer may pursue them |
| Spouse crashes your car (listed) | ✅ Increases | ❌ Unaffected (on same policy) |
💡 Interesting: The person who crashes YOUR car doesn't get their own premium increased — because the claim is on YOUR policy, not theirs. But if the insurer pursues them for recovery, that may affect them.
Should You Let Someone Drive Your Car?
| Situation | Safest Approach |
|---|---|
| Spouse / partner | ✅ Add them as a named driver |
| Family member visiting | ⚠️ Check your policy covers occasional drivers |
| Friend for a quick errand | ⚠️ Accept the risk — they're covered (with your excess) |
| Someone with a history of accidents | ❌ Don't lend your car — any accident will affect YOUR premium |
| Someone under 25 | ⚠️ Young driver excess may apply — check your policy |
Key Takeaway
- If someone else crashes your car, YOUR insurance policy pays — not theirs.
- You pay the excess and your premium increases.
- Named drivers are covered; unlisted drivers may or may not be covered.
- An unlicensed driver or someone under the influence = claim likely denied.
- Always add regular drivers as named drivers — it doesn't cost much and avoids claim complications.
- Your premium goes up — but your friend's premium typically doesn't (unless the insurer pursues them).
- If in doubt — don't lend your car. The financial risk of a claim is yours.
Last updated: July 2026
Disclaimer: This article provides general information about insurance when someone else drives your car in Australia. Policy terms vary by insurer. Always check your PDS for "permissive use" and "named driver" provisions.