I’ve had a car accident and I’m uninsured!

This fact sheet is for information only. It is recommended that you get legal advice about your situation.


Joe owned an old Holden. He was driving to visit a mate when he had an accident. He had been driving along happily listening to music when he suddenly saw a car appear in front of him. He could not stop in time and ran straight into the car in front. He exchanged details with the other driver.

Joe didn’t have any insurance; he had only registered the car and paid the green slip.

Joe has now received a demand for $5300 from BIG INSURANCE COMPANY for the accident. Joe is really annoyed. There is no way he can pay the money, as he is unemployed.

If you have had a car accident also look at the brochure from Legal Aid NSW Have you crashed your car? What to do about property damage. You can download it from  www.legalaid.nsw.gov.au

Also see Fact sheet: Getting help below for more information.


Generally, any driver who is negligent (does not take reasonable care) is at fault. This can sometimes mean both drivers are at fault. You need to work out whether:

  • You are at fault (and can be made to pay for any damage you caused).
  • You are not at fault.
  • You and the other driver are both at fault (and can be made to pay for any damage you caused to the extent you were at fault – for example if you contributed 50/50 to the accident you can only be made to pay for 50% of the damage, and can claim 50% of the cost of repairs to your car). Remember that the value of the cars will determine the outcome of an apportionment of liability i.e. if your car is not worth as much as the other car you may still lose.

Example: you hit 2007 BMW in your 1994 Ford Laser and both drivers are 50% at fault. The damage to your Laser is assessed at $2,600 and the damage to the BMW at $12,500. 50% of $ 12,500 = $6,250;50% of $ 2,600 = $1,300. Therefore you owe $6,250-1,300 = $4950, in addition to paying to get your own car fixed!

Road rules differ in every Australian state and territory. The Insurance Law Service is unable to give legal advice as to who is at fault in motor vehicle accidents. If you want advice as to whether you can hold the other party liable, you should seek legal advice from another service such as:

  1. Legal Aid (see legalaid.nsw.gov.au/contact-us/legal-aid-nsw-offices)
  2. a community legal centre (search available here: http://www.naclc.org.au/clc_directory.php) or
  3. a private solicitor.


It can help if you:

  • Draw a diagram of the incident;
  • Write down your version of events;
  • Provide any numbers of witnesses that corroborate your version of events;
  • Look up the road rules;
  • Obtain any CCTV or other video footage that may assist. CCTV footage can be over-written at regular intervals, so you should act quickly yourself to obtain any relevant evidence that you believe could assist you.



You will need to pursue the other driver and/or owner of the other car.

If you want to pursue another party, you need to take action.  This will usually involve:

  1. Negotiating directly. If you do not receive a response, you should follow up.  If an insurer is involved, you can also escalate it to the insurer’s complaints department
  1. Making a complaint in the Australian Financial Complaints Authority (AFCA) if:
  1. You are not at fault
  2. The damage is less than $15,000
  3. The other driver is insured (and claims on their insurance) . See below for more information


  1. Sending a letter of demand and commencing a claim in Court (if the demand is not paid).  In some jurisdictions, such as Queensland, there may be a tribunal available as well for some car accident disputes.


This is not an area our service provides advice on.  You may be able to get advice from your local Legal Aid office or local community legal centre

Remember that if the case goes to Court it is unlikely that a legal centre or Legal Aid will represent you. The insurance company will usually be represented.  There may be a risk you may end up paying the other side’s court and legal costs (if you lose, or something else goes wrong). It may be worth trying to reach agreement with the insurance company first rather than going to court.


You cannot “claim” on the other driver’s and/or owner’s insurer in the same way as you would if you were claiming under your own policy.  The other person’s insurer has no contractual obligations towards you, the insurer stands in their customer’s shoes.  They may be willing to negotiate with you, but do not have to, and there are no set timeframes for them to have to respond to you.

The other party’s insurance company may be willing to negotiate with you. They may ask to assess your car, to offer you a hire car, or to do repairs for you.  It is up to you if you wish to agree to any of this. You need to check the terms and scope of what they are offering. You should refuse if there is a risk the car may be a write off and you do not want the insurance company to write off your car – see fact sheet here: https://insurancelaw.org.au/factsheets/your-vehicle-has-been-written-off-factsheet/

You can choose to get your own quotes or do your own research about the value of your car (if it is a write-off) and pursue the insurer for a cash settlement instead.  The usual damages you are entitled to are:

Repair cost of damage incurred OR market value of the car – whichever is the smaller amount

PLUS    towing costs

PLUS   demurrage (hire car costs, lost wages or profits for income-earning cars)

The costs that you can recover are limited to what is reasonable given the circumstances – taking into account factors such as the age / make / model / condition of the car.  These costs must also be reasonably connected to the accident itself.

You have an obligation act reasonably to mitigate or minimise your losses and it is generally a good idea to get 2 or 3 quotes so you can show your costs were reasonable.

If  you are unable to reach an outcome through negotiations, and the damage is under $15000 (or you are prepared to accept this amount) you can lodge a dispute against the other person’s insurer in AFCA. As it is free, it is recommended that you do make a claim through AFCA if you can. You can make a claim in AFCA by going to the website at www.afca.org.au, or calling 1800 931 678.

What if the other party has not claimed on their insurance?

The other driver or owner has the right to choose if they will claim or not.  You cannot force them to claim.  If a claim is not made, their insurer does not have to do anything and a complaint cannot be made to AFCA. You can still commence action against the other driver in court.

The only exception is where the other driver or owner has either disappeared or died.  If this is the case the insurer is liable to whatever extent they would have been if a claim had been made (i.e. usually they will payout minus the excess) and AFCA can accept a complaint.

What if the other party has claimed on their insurance but has not paid their excess?

You could talk to the other driver and/or owner and try to convince them to pay the excess. If they are in hardship, the insurer has to consider a repayment arrangement to let them pay the excess over time.

If the other driver has a valid claim but cannot or will not pay the excess, you can request the insurer to pay out your damages, minus the excess their customer should have paid.  AFCA can consider these sorts of complaints. You can get advice about pursing their customer separately for the excess amount.

What if the other party has claimed on their insurance but the insurer is saying there is a problem and they cannot do anything?

This is a difficult situation as there needs to be a valid claim for the insurer to become involved.

There can be many reasons why there is a problem with the claim, for instance:

  • There may be a policy exclusion – e.g. the other driver was under the influence of drugs or alcohol;
  • The other driver may not be cooperating with the insurer – refusing to supply information or documents to allow the claim to be progressed; or
  • The insurer may have discovered information that means they never would have insured their customer, and can therefore deny the claim.

The insurer is likely prevented by privacy reasons from telling you what the actual reason is. You could wait and see if the situation resolves itself. You could also start escalating the matter to the insurer’s complaints department and then to AFCA but they may not be able to do anything if there is no valid claim.

Your other option is to consider court or tribunal proceedings against the driver and/or owner, and you should get further advice from a legal service in your state or territory.


As soon as you receive a claim you need to act promptly. The usual process is:

  1. You receive a letter of demand.
  2. A debt collector may also contact you.
  3. You may receive a Statement of Claim/Summons from the Court. Court and legal costs will be added to the amount claimed against you.
  4. You have the option of lodging a defence within a set timeframe (usually after 21 or 28 days, depending on which state or territory you are in). If you lodge a defence, the matter will move towards a hearing. If you lose, or something goes wrong, you may end up paying the insurer’s legal and court costs.
  5. If you do not file a defence to the Statement of Claim/Summons issued by the other driver the (plaintiff), or their insurance company, will get judgment against you automatically after your timeframe to respond passes (
  6. Once it has judgment the insurer can use Court powers to get you to pay, for example, garnisheeing your wages, seizing property and/or making you bankrupt.

Ideally, you want to make an arrangement to pay when you receive a letter of demand so you can avoid Court action against you.


If you do not agree you are at fault, get advice from your local Legal Aid or community legal centre first and do this urgently before the letter of demand expires.

If you agree you are at least partially at fault and the amount claimed seems reasonable, then you have two options:


If you can pay the amount claimed then this is the quickest way to resolve the letter of demand.

If an insurance company is pursuing the money then it will often negotiate a discount if you can pay straight away. It is worth trying to offer less as a lump sum or offer to pay the full amount by instalments. If the insurance company agrees to a lesser amount you should confirm this in writing.


If you cannot afford to pay the amount claimed all at once you will need to negotiate a repayment arrangement. Under Section 8 of the General Insurance Code of Practice the Insurance Company must offer you the opportunity to pay the debt by instalments if you are in financial hardship. Do not make a repayment arrangement you cannot afford!

If the repayment arrangement you are requesting is going to be difficult to afford and/or take a long time to repay (say over 3 years) get financial counselling advice before offering the repayment arrangement. If you are on a low income such as Centrelink payments- see below under the heading “What if I cannot afford to repay the debt claimed at all?”.

Phone 1800 007 007 for a referral to your nearest free financial counsellor for help with making a repayment arrangement.


Persist in trying to negotiate! Also get advice!

If the debt collector or the insurer unreasonably refuses your request you can ask for the repayment arrangement to be reviewed through the Internal Dispute Resolution process at the insurance company. If that request is refused you can also complain to the Code Compliance Team with this Sample letter: Insurance code complaint


Get advice from a financial counsellor. It may be possible to get the debt waived by the insurance company if you are ill and/or in extreme financial difficulty. Try the sample letter below:

If you do not get a response or your request is rejected make a complaint about the breach of the General Insurance Code of Practice.

Attach copies of your previous correspondence with the insurer, and details of any phone conversations, including if possible the date, the name of the person you spoke to and what was said to the best of your recollection.


The general principle is that the party not at fault should be restored to the same position as before the accident as far as is reasonably possible.

As a general guide, you would normally be responsible for:

Repair cost of damage incurred OR market value of the car – whichever is the smaller amount

PLUS    towing costs

PLUS   demurrage (hire car costs, lost wages or profits for income-earning cars)

The costs that the insurer can recover is limited to what is reasonable given the circumstances – taking into account factors such as the age / make / model / condition of the other car, and the availability of car repairers in the area. These costs must also be reasonably connected to the accident itself.

The insurer has an obligation act reasonably to mitigate or minimise their losses.  However they do not have to:

  • get more than one quote
  • allow you access to their customer’s car to perform your own inspections or get your own quotes, or use your proposed repairer
  • wait for your approval before their customer’s car can be repaired
  • contact you within so many days or months of the accident, or keep you informed. In most Australian jurisdictions, insurers have 6 years to chase you (except in the Northern Territory, where it is 3 years)
  • provide you with copies of their evidence (such as photos, quotes, assessor’s reports or witness statements). Some insurers will provide these if you ask, as it may help towards a negotiated outcome. However you can not force them to provide it as part of negotiations. You may be able to compel this evidence as part of court proceedings if it gets to that stage, but court and legal costs risks will be an issue and you should seek further advice from a legal service in your state or territory if you are considering this.

Be realistic. Remember fixing cars can be expensive! Also remember that the insurance company will also want to minimise the cost of repairs.

TIP: Insurance companies will often agree to settle the debt claimed for a lesser amount if you pay in full straight away.

If the insurer pursues you for an amount you believe is excessive, you should gather as much evidence and research as you can to establish this. Your own photos of the damage taken directly after the accident, or the observations of a witness may be relevant. Ask the insurer for copies of itemised bills, photos, assessor’s reports etc.

When you get a reply, review the further information carefully. If you still believe it is excessive then you need to say why and provide evidence.  For instance, your own mechanic may be able to give you a written opinion of what would fall within a reasonable range of repair costs based on any photos or quotes you have.

If you still think the amount being claimed is unreasonable send a letter in reply, explaining your position and attaching any evidence to support your case:  Sample letter: Disputing amount claimed

You may want to request that the amount of repairs be reviewed by the process at the Insurance company.  You can search for these details here via the AFCA website

TIP:  Get the settlement confirmed in writing.  Be clear on what it is you are settling – if it is the full amount, or just the cost of repairs, does it include hire car costs.  If you only settle the repair cost, you can find yourself being chased later for other costs (eg. hire car) from the insurer, or the other driver directly.

Ultimately, if a negotiated outcome cannot be reached, the insurer can start court action for the amount they believe is justified. Legal costs and court costs will generally be added onto the amount claimed if this happens.

You can choose to lodge a defence, but you must be careful and get legal advice first. The court has a wide discretion to make orders that one party pay the other parties costs – for instance, the courts may order the losing party pay the reasonable legal costs of the winning party.

REMEMBER:  If you are arguing that the amount claimed is too much, this means you still owe some of it. Be prepared to pay, or start paying, the amount you agree you owe.


A Statement of Claim/Summons is a legal document and may have consequences for you if you fail to respond to it within the time specified. Time is of the essence.  Different states and territories have different processes and timeframes so contact a legal service in your state or territory for advice on responding.


The short answer is NO.  You may be approached by a third party who offers to settle a recovery they have against you on the condition that you pay for their “insurance excess”. The insurance excess is the cost an insured person may incur if they choose to make a claim with their insurer.

You should be careful about accepting any settlement offers on this basis as:

  • You usually will obtain no benefit from paying somebody else’s insurance excess; and
  • the insurer can still legally pursue you for the full cost of the claim.

Paying the third parties excess should not be confused with settling a dispute ‘in full and final settlement’ of the claims they may have against you

Seek legal advice about what a full and final settlement should include for your matter.


See Fact sheet: Getting help for a list of additional resources.

Last updated: July 2019.