What happens if someone else crashes your car in Australia?

If you lend your car to a friend, housemate, or visiting relative and they get into an accident, who is legally and financially responsible?

Whether the crash was minor or major, things can quickly get complicated, especially when it comes to insurance claims, liability, and excess payments.

This guide explains exactly what happens if someone else crashes your car in Australia, including what your policy might (or might not) cover and what you should do next to protect your vehicle—and your finances.

Are you covered if someone else crashes your car?

Many assume their insurance will cover anyone driving their car, but that’s not always the case. Whether or not you're covered depends on your insurance policy, the driver’s age and licence status, and whether they’re a listed driver.

What you need to know:

• CTP insurance only covers injuries to people, not property damage. That means if someone else crashes your car, you’ll need comprehensive insurance to cover vehicle repairs or damage to other cars.
• Some comprehensive policies may cover unlisted drivers, but this usually comes with an additional excess, and some won’t cover them at all.
• If someone drives your car regularly (like a housemate or partner), it’s smart to list them on your policy to avoid claim complications.

For a deeper breakdown of what to look for in your cover, look at our guide to 7 things to check in your car insurance PDS.

It covers key terms like driver exclusions, excess types, and listed vs. unlisted driver rules, so you can confidently lend your car (or decide not to).

You're on the hook for an at-fault driver situation

Regardless of how much cover your car insurance policy offers, or who you choose to nominate as a permissive use driver, it's still you who's financially liable in an at-fault driver situation.

In the instance that a friend crashes your car, you may be left having to foot the full cost of damages yourself, or take the unpleasant route of suing your friend for the money.

It may sound overly cautious, but it's a smart idea to check someone's driver's licence as well as your car insurance policy before lending them your car. If your friend’s licence is cancelled or suspended, your insurance company can deny a claim for cover.

In some circumstances, your friend may even have grounds to sue you for personal injury if they were injured in the crash, for example, if they can show your car wasn't roadworthy or appropriately maintained.

It goes without saying that car accidents are stressful enough without adding the financial implications of third-party at-fault accidents into the equation.

The bottom line: Lending your car could cost you

When you hand your keys to someone else, you’re also handing them a level of responsibility — but if things go wrong, you may still bear the consequences. From policy exclusions to premium hikes, there’s often more at stake than just panel damage.

Most car insurance policies only cover you and any listed drivers. Lending your car to someone outside that list, even just for a quick errand, can leave you facing out-of-pocket repair bills, higher excess payments, or even a denied claim.

If sharing your vehicle is unavoidable, ensure your policy includes comprehensive cover and that regular drivers are listed. Otherwise, what starts as a favour could quickly become a financial headache.

Have you had an accident already? Sheen can help. We’ll tow your vehicle, assist with your claim, arrange a replacement car, and return it to pre-accident condition fast.

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Frequently asked questions about lending your car

Is letting someone else drive my car in Australia legal?

Yes. As long as the person has a valid licence and your vehicle is registered and roadworthy. However, legality doesn't guarantee insurance coverage. You must check your policy to see if unlisted drivers are included or excluded.

Will my insurance cover someone else if they crash my car?

It depends on your policy. Some comprehensive insurance policies cover occasional unlisted drivers but may apply a higher excess. Others may not cover unlisted or young drivers at all. Always check the Product Disclosure Statement (PDS) to know where you stand.

What happens if the driver wasn’t listed and was at fault?

If the driver was unlisted and found at fault, you could be liable for damage, including your car, the other party’s vehicle, and even property. Your claim might be accepted with a higher excess or rejected entirely, depending on your insurer’s rules.

What are the risks of letting someone drive without a valid licence?

Allowing someone to drive your car without a valid licence is illegal and significantly increases the risk of severe consequences. Unlicensed drivers are overrepresented in fatal crashes, accounting for approximately 8% of drivers involved in all fatal road crashes in Victoria. They are also more likely to engage in risky behaviours such as speeding and drink driving. If an unlicensed driver causes an accident in your vehicle, your insurance may not cover the damages, potentially leaving you liable for substantial costs.