Your damage and loss liability when you borrow cars

Short answer:

If you’re responsible for damage to a car your borrow through Car Next Door, the most you’ll need to pay is your Damage and Loss Liability amount - subject to some common-sense exclusions.

There are some exclusions to the cover. These include driving off-road or to the snow, towing, and letting people who aren't approved Car Next Door members drive the car.

What’s covered

Our risk protection covers loss and damage up to $40 million. This covers you if you are responsible for:

  • Damage to the vehicle
  • Loss of the vehicle due to theft or fire
  • Towing, storage and recovery charges
  • Third party loss

You also receive complimentary roadside assistance for mechanical issues.

What’s not covered

There are exclusions to your cover. You may be responsible for the full cost of any loss or damage if you:

  • Use the car to tow anything
  • Drive off-road or on an unsealed surface
  • Drive through water or on the beach
  • Drive above the snow line during snow season
  • Drive for rideshare or courier services or competitive driving
  • Drive with a warning light on or after becoming aware of a mechanical fault, or when the car is in an unsafe or unroadworthy condition
  • Drive under the influence of drugs or alcohol, or refuse to submit to a test
  • Drive while using a device (e.g. texting)
  • Leave the car unlocked or fail to secure the key in the Lockbox when returning the car
  • Put the wrong fuel in the car
  • Damage the underbody or the roof of the car
  • Carry more passengers or cargo than the car is designed for
  • Carry anything dangerous or illegal, or use the car in connection with any illegal activity
  • Pick up hitch-hikers
  • Jump start the car, or use it to jump start another car
  • Use the car in a reckless or dangerous way or contravene traffic regulations
  • Commit fraud or fail to provide information that is relevant to an insurance claim
  • Flee the scene of an accident

Who’s covered

You and any other approved Car Next Door members are covered. There is no fee to share the driving with another Car Next Door member.

If the car has a manual transmission, all drivers must have at least 2 years of manual driving experience.

If you allow someone who does not meet these criteria to drive, you may be responsible for the full cost of any loss or damage that occurs.

When you’re covered

You’re covered by our damage and loss protection and roadside assistance from the time you pick up the car to the time you end your trip.

This also means you're responsible for any loss or damage to the car during this period - even if it’s not your fault.

If you are more than 2 hours late returning the car, you may be liable for the full cost of any loss or damage. Be sure to extend your trip to stay covered by our policy.

What you’ll owe for loss or damage

You’ll be liable for the costs of:

a) damage to the Vehicle that requires repair or replacement (excluding normal wear and tear);
b) loss arising from theft of the Vehicle or fire damage to the Vehicle;
c) towing, storage and recovery charges;
d) fees and charges relating to the assessment or quantification of the loss or damage;
e) Third Party Loss; and
f) a loss of use payment to the Owner for each day their car is unavailable;

up to your selected Damage and Loss Liability, for each damage incident.

If any of the exclusions to cover apply, you’ll be liable for the full cost of repairs or replacement and any applicable fees.

If you weren’t at fault in a third-party accident, we’ll refund any costs we recover from the at-fault party. Be sure to get the contact details of any other drivers involved in an accident.

How to protect yourself from costs

Sometimes, accidents happen. The best way to protect yourself from unexpected damage costs is to reduce your Damage and Loss liability. You can do so by upgrading to Premium Protection when you book or anytime before your trip begins.

You can also protect yourself by uploading clear photos of the entire car before and after your trip. These photos are your first line of defence in a damage dispute.

If your photos can't prove the disputed damage happened before or after your trip, you may be held liable. It's important to make sure you don't miss any parts of the car and that your photos are well-lit and not blurry.

How Car Next Door's risk protection works

Car Next Door provides access to risk protection to our Members using an Aggregate Deductible Fund (ADF) for motor vehicle risks when you list a car or borrow a car from our platform.  

The ADF is a group risk management scheme which is administered by Car Next Door and supported by a self-funded pool and a group insurance policy. The ADF is operated for your benefit. We will charge you an amount for the protection provided by the ADF and this is pooled with contributions made by other Car Next Door members.

If you borrow cars through Car Next Door, you are covered by the ADF for the period when you have possession of the vehicle, as defined in the Damage Policy. If you list a car through Car Next Door, you are covered for the period when your car is listed (if your car is on the Instant Keys Plus+ or Legacy sharing plan) or whilst your car is in a Borrower's possession (if your car is on the Instant Keys or Key Handover sharing plan), as described in clause 11 of the Owner Agreement.

Car Next Door does not hold an Australian financial services licence and you should consider obtaining your own advice about the ADF. Car Next Door will advise you in writing if your entitlement to a payment from the ADF changes or if it is discontinued. Car Next Door is obliged by law to compensate you for loss or damage you suffer if it fails to give you reasonable notice of events/changes to the ADF that could affect you adversely.

You can verify the currency of the ADF including the group insurance policy, by viewing the certificate of insurance

Related articles

Your responsibility for damage when you borrow a car

Exclusions to the damage and loss protection

Damage and Loss Liability


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