Can You Make an Insurance Claim When Driving Someone Else’s Car?

Introduction

Usually, a claim for damage while you are driving a borrowed car will depend first on the cover arranged for that vehicle—but cover is not automatic. The owner’s policy wording, schedule, driver eligibility, how the car was being used and the facts of the crash all matter. Permission to drive is important, but permission alone does not guarantee that an insurer will accept a claim.

In our editorial review, the safest approach is to check the owner’s current policy documents before borrowing the vehicle, rather than assuming your own motor policy will step in. If you are comparing cover for your own vehicle, see our car insurance information.

This is general information for New Zealand readers, not personalised insurance or legal advice.

The short answer: can you claim?

A claim may be possible if the borrowed vehicle has applicable insurance and the driver and incident meet that policy’s terms. In practice, the owner or policyholder should normally contact the insurer that covers the vehicle and follow its claims process. Exactly who can communicate with the insurer or submit information can vary.

Do not rely on either of these assumptions:

• “Insurance always follows the car.”
• “My own insurance automatically provides secondary cover when I borrow another car.”

Neither is a safe general rule. The outcome depends on the particular insured vehicle, insured persons, driver conditions, exclusions, limits and claim circumstances.

What to check before borrowing a car

Why the cover type matters

New Zealand consumer guidance commonly describes motor insurance as comprehensive, third-party fire and theft, or third-party cover. The protection differs substantially:

• Comprehensive cover may cover accidental loss of or damage to the insured vehicle, as well as damage caused to another person’s vehicle or property, subject to policy terms, limits and exclusions.
• Third-party fire and theft cover has a narrower scope than comprehensive cover.
• Third-party cover is generally aimed at damage the driver causes to other people’s property; it generally does not insure accidental damage to the borrowed vehicle itself.

Therefore, a borrower who damages the owner’s car should not assume that third-party cover will pay to repair that car. Read the policy wording and schedule, and ask the insurer if a term is unclear.

Driver eligibility: the details that can change the outcome

When we compare policy information, driver eligibility is one of the most important areas to read carefully. Insurers may ask for information about the vehicle’s main driver and additional drivers, and relevant changes should be updated with the insurer.

Policies can also contain driver-specific conditions. For example, Financial Services Complaints Ltd has published a case study in which an under-25 driver exclusion led to a declined motor claim. This does not mean every policy excludes drivers under 25. It shows why the owner should check the actual schedule and wording before lending the car to a younger driver.

Learner drivers must also comply with their legal licence conditions. NZ Transport Agency Waka Kotahi says a supervisor must sit beside a learner driver and L plates must be displayed. Non-compliance can lead to enforcement action and may also be relevant to an insurance claim.

If a crash happens while you are driving the borrowed car

1. Make the situation safe and deal with injuries first. Where there is an injury, report the crash to Police as soon as practicable and no later than 24 hours.
2. Exchange details after a non-injury crash. Police says motorists should exchange names and addresses.
3. Record the facts. Take photographs, note the location, time, vehicles and what happened, and collect witness contact details where available.
4. Report property damage correctly. If someone else’s property was damaged, report it to the owner within 48 hours. If the owner cannot be located, report it to Police within 60 hours.
5. Tell the owner immediately. Be clear about who was driving and the circumstances.
6. Contact the insurer covering the vehicle promptly. Follow its claim instructions. Have supporting material ready, such as photos, reports, receipts and other relevant documents.

A Police report is not automatically created for every non-injury crash. Make a report where it is required or appropriate; do not assume Police attend every incident.

Excess, fault and recovery

An excess is the amount that may be payable toward a claim. The amount, who pays it and whether it can be waived or recovered are policy- and evidence-specific. Do not assume that the owner will pay it, that the borrower will pay it, or that an excess will be refunded after a hit-and-run driver is found.

If another driver appears to be at fault, do not assume you can claim directly from that driver’s insurer. Where the borrowed vehicle has applicable cover, the owner should normally contact their own insurer, which may consider recovery. If there is no applicable cover, options depend on liability, evidence and the people involved. The Disputes Tribunal may be suitable in some circumstances, but it is not a guaranteed route to recovery.

Current legal context

The old reference to an “Insurance Contracts Act 2015” should not be used: there is no New Zealand statute by that name. The Contracts of Insurance Act 2024 is enacted, but the official legislation page records it as not yet in force as at 17 August 2026. For a borrowed-car claim now, focus on the current policy wording, schedule and the insurer’s claim instructions.

Practical Takeaway

Before taking someone else’s keys, confirm that the owner has agreed, ask to see the current policy schedule and check the following:

• the cover type and whether damage to the borrowed car is insured;
• whether you meet any driver, age, licence, use or additional-driver conditions;
• the applicable excess and special terms;
• what the owner expects you to do if there is a crash.

After an incident, preserve the evidence, meet the applicable Police reporting requirements, notify the owner immediately and follow the vehicle insurer’s process. Honest, complete information is essential. A claim can be declined or limited where policy terms are not met, so obtain confirmation from the insurer when there is doubt.

Author / Editorial Team

This article was produced by Insurspy’s internal editorial and research team. In our editorial review, we prioritise current New Zealand government, dispute-resolution and industry guidance, and we compare policy information without treating any one insurer’s wording as universal. We review content for accuracy and practical usefulness, but readers should always check their own current policy documents and seek tailored advice where needed.

References

• Consumer Protection, Ministry of Business, Innovation and Employment — Car insurance
• Insurance Council of New Zealand — Motor Insurance: What You Need to Know
• Insurance Council of New Zealand — How to Make an Insurance Claim
• Insurance Council of New Zealand — Duty of Disclosure: What to Tell Your Insurer
• NZ Transport Agency Waka Kotahi — Conditions of a learner licence
• New Zealand Police — Traffic crash report
• Financial Services Complaints Ltd — Car crash crisis
• New Zealand Legislation — Contracts of Insurance Act 2024