This is a summary for our Car Owner Members of how Car Next Door’s insurance protects you in the event of damage to your car – whether it’s caused by a Borrower or by you.
Your car is covered under Car Next Door’s fleet insurance policy
When you join Car Next Door you can cancel your existing comprehensive insurance, as damage to your vehicle is covered under Car Next Door’s fleet insurance policy.
Borrowers are also covered by our fleet insurance policy when they are driving your vehicle.
Car Next Door’s insurance policy covers any accidental loss or damage to, or theft of, your vehicle; or third party loss (“Loss”) (subject to the terms and conditions and exclusions set out in the Damage Policy and Member Agreements).
If your vehicle is damaged by a Borrower
If your vehicle is damaged during a Borrower’s booking, then the member who had the vehicle at the time will be liable to pay for repair or replacement of the vehicle – you will not bear any of the costs for these repairs.
The Damage Policy has all the detail on how repairs are organised.
If your vehicle is damaged outside of a Borrower's booking
If your vehicle is damaged when you are using it yourself, the most you will pay is your Damage Cover Liability amount (unless you’ve done something that’s a serious breach of the Member Agreement)
If your vehicle is damaged outside of a Borrower’s booking (i.e. when you or your nominated Additional Driver have the car, or when it is parked outside of a booking), then you will be responsible for paying for repair or replacement of the vehicle, up to the amount of your or your Additional Driver's Damage Cover Liability (like you would with a regular comprehensive insurance policy). This includes loss or damage due to storm, fire or theft.
However, if the vehicle is damaged outside of a booking where third party was at fault (and you can provide full details of the other vehicle and driver), then you will not have to pay anything.
Your Damage Cover Liability or ("DCL") amount is $500 if you are responsible for damage, or between $500 and $3,000 if your Additional Driver is responsible for damage (depending on their age and whether they have a full or restricted licence).
As with any insurance policy, though, there are some exclusions from cover. You are not covered if you (or your Additional Driver) commit a serious breach of the Member Agreement (e.g. if you drive while intoxicated). For a full list of the circumstances when you would be excluded from cover under our insurance policy, please see the Member Agreement.
The difference between ‘damage’ and ‘wear and tear’
Our fleet insurance policy does not cover normal wear and tear to your vehicle. Wear and tear includes things like scuffing of paintwork or interiors, wear to tyres, etc. You can find a detailed description of ‘wear and tear’ in the Damage Policy.
As a shared vehicle, your car will see more use and so experience some more wear and tear. In our experience, Borrowers are extremely conscientious about using cars through Car Next Door. They know that they belong to real people, and are accordingly careful. However, over time it is unavoidable that your vehicle will experience some wear and tear.
You are compensated for this through the per-kilometre payment that you receive. For each kilometre that a Borrower drives, you receive 25 cents. This covers both fuel and the contribution to tyre wear and servicing requirements (which the RACV estimates to be less than 8 cents per kilometre for a medium-sized car).
In addition to this cost recovery through the per-kilometre charge, your car will now be making money each hour or day that it is rented out. Rather than sitting in the garage, staying pristine but doing nothing, your car is now doing more of what it’s made for – and offsetting its standing costs at the same time.
What happens when it’s not possible to work out who is responsible for damage
In our first two years of operation we had over 10,000 bookings made by Borrowers. There were only 45 instances of disputed minor damage incidents in this period (0.45%). Most of these instances involved repairs under $200.
We make every effort to minimise these instances, including by vetting borrowers and maintaining a conscientious community of Borrowers and Owners.
However, when a car is parked on the street and shared through our convenient instant booking system that allows Borrowers to collect and drop off cars at any time of night or day with no need to meet, there may occasionally be cases of minor damage when it is genuinely difficult to work out who is responsible.
If there is a dispute about whether particular damage was caused during a Borrower’s booking or before or after the booking, then the Borrower is responsible unless they can prove that the damage occurred outside of their Booking. We require Borrowers to take photos at the beginning and end of their booking to protect themselves in the event of a dispute.
Checking your car and reporting damage
As an Owner, it is good practice to check your car before and after each trip, wherever possible, and report damage as soon as possible. For more detail , see our FAQ on checking your car and reporting damage.