Car insurance policies in Australia use two different approaches to driver coverage: open policies that cover any licensed driver, and listed or named driver policies that restrict coverage to specified individuals. Within those structures, most comprehensive policies apply additional conditions around young or inexperienced drivers — either requiring them to be listed, charging a higher excess if they drive, or excluding coverage entirely. Getting this wrong is expensive: an unlisted driver at fault in an accident can mean a claim is denied or a significantly higher excess applies.
Most comprehensive car insurance policies in Australia are "open" in the sense that any licensed driver can drive the car and the policy will cover them — subject to the conditions and excess that apply to that driver's profile. However, within an open policy, there are almost always additional conditions that apply to young or inexperienced drivers.
Some policies (typically lower-premium products) are "listed driver" or "nominated driver" policies that only cover drivers specifically named on the policy. If anyone other than a listed driver is involved in an at-fault accident, the claim may be declined entirely. These policies are less common at the comprehensive end of the market but more prevalent in budget and third-party fire and theft products. Always check whether your policy is open or listed before allowing someone else to drive.
Insurers in Australia define "young" or "inexperienced" drivers differently. Common thresholds are under 25 (the most prevalent), under 21, or under 30 for some products. Some policies distinguish between age and experience, treating any driver with less than 2–3 years of licensed driving experience as a young driver regardless of age. The key variable is not just the age bracket but what consequence applies when a young driver is behind the wheel at the time of a claim.
The consequence structure varies by insurer and product:
| Structure | What it means |
|---|---|
| Young driver excess on top of standard excess | An additional excess (typically $500–$2,500) applies if the at-fault driver is under the specified age. The claim is otherwise processed normally. |
| Young driver listed as additional driver | No additional excess if the driver is named. Benefit: lower claim cost. Drawback: premium increases to reflect the listed young driver's risk profile. |
| Named driver restriction | Only listed drivers are covered. If an unlisted young driver has an accident, the claim is declined. |
| Young driver exclusion | Claims involving a driver under a certain age are explicitly excluded. No coverage at all, regardless of whether other drivers are listed. |
The most common structure at mainstream Australian insurers (NRMA, Suncorp, AAMI, Budget Direct, QBE) is an additional young driver excess — the claim is paid but the policyholder bears the extra excess. A $500 base excess plus a $1,500 young driver excess means a $2,000 out-of-pocket cost before the insurer pays anything. On a vehicle worth $15,000, that is a significant proportion of the total loss.
If a young person regularly drives your vehicle — your adult child using the family car, a partner under 25 — the right approach is to list them as a named additional driver on your policy. This has two effects: it may increase your annual premium (typically by $100–$400 depending on the driver's age and experience), and it removes or reduces the young driver excess that would apply if they had an at-fault accident.
The premium increase for listing a young driver is almost always less than the additional excess you would pay in a claim. A $300 annual premium increase versus a potential $1,500 additional excess at claim time is a straightforward calculation.
The "occasional driver" question is a grey area in Australian insurance. Most policies state that they cover any licensed driver with the owner's permission — but this is subject to the young driver conditions above. An adult friend borrowing your car once is generally fine under an open policy. A young person under 25 borrowing your car regularly is a different situation: if they are involved in an accident and the insurer determines they are a regular rather than occasional driver, some policies treat this as a material misrepresentation, particularly if the young driver was never disclosed. This can affect how the claim is assessed.
The safe approach: if anyone under your policy's young driver age threshold drives your car more than occasionally, disclose them to your insurer. The cost of listing them is modest. The cost of not listing them — if they are in an at-fault accident and the insurer considers it a material non-disclosure — can be denial of the entire claim.
Most comprehensive policies automatically cover learner drivers who drive with a supervising licensed driver as required by law. The learner is generally not required to be listed as an additional driver, though some policies impose an additional learner driver excess. Check your PDS specifically for learner driver conditions — they are almost always in a separate section.
Once a learner obtains their probationary licence, they transition to the young driver conditions above. A P-plater who was covered as a learner is no longer automatically covered — the P-plate licence means young/inexperienced driver excess conditions now apply.
If a young person owns their own vehicle, a separate policy in their own name is typically the right structure rather than adding the vehicle to a parent's policy. Reasons: the young driver's vehicle is insured at its own value rather than being an unnamed vehicle on a parent's policy; the young driver begins building their own no-claim discount history; and the parent's policy is not affected by claims on the young driver's vehicle. Young driver premiums are higher than mature driver premiums, but they are the accurate premium for the actual risk. Building a no-claim history now reduces premiums substantially within 3–5 years.
Check whether your current car insurance is priced fairly for your driver profile.
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