Ask LH: What Are The Risks In Driving Someone Else’s Car?

Dear Lifehacker, I’ve always been worried about driving cars that belong to other people, especially if I think they may not have a third party insurance policy. What would happen if I was found to be at fault? Would I be liable for the full costs involved, or would they be shared with the owner of the borrowed car? If the risk is too great, should I say no when a friend asks me to drive them home? Thanks, Third Party

Car accident picture from Shutterstock

Dear TP,

This is a difficult question to answer without having any particulars to work with. Does the car owner have comprehensive car insurance? Have they made any previous claims? Did they opt to pay a lower yearly insurance charge for higher excess fees? How old are you and how long have you held a full licence? These are just some of the factors that can affect what happens in the event of an accident while you’re driving a friend’s car.

If your friend’s car is registered it will have Compulsory third party insurance (CTP) by default. This covers your legal liability for accidents in which you caused injury or death. This is a legal requirement for all states in Australia and is usually covered in your registration fees (the exception is NSW and Queensland, where drivers have the option of choosing a CTP provider.)

However, CTP does not insure you for damage caused to vehicles or property, which is where your friends’ car insurance comes in.

It’s highly unlikely that any of your mates listed you as a driver when applying for their car insurance — but that doesn’t necessarily mean you won’t be covered. NRMA Insurance, for example, extends to anyone who drives the car.

Even if your friends’ insurance policy does cover additional drivers, there could still be hefty excess fees involved, especially if you’re under 25 years of age. Some insurance policies don’t even cover drivers under 30. The excess fees can add up to a few thousand dollars even when third-party property damage is covered.

If you have a friend who regularly asks you to drive their vehicle, it might be worth asking for a copy of their Product Disclosure Statement (PDS): that way you can see exactly what’s covered and decide whether the risks are worth taking.

That said, if the accident is minor and only involves property damage, it will generally be the car’s owner who gets stuck with the deductible. Whether you choose to be a good mate and reimburse him/her is largely up to you.

If any of our readers have their own tips or anecdotes to share, let TP know in the comments section below.


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