Emergency services were called to the intersection of Pyramid-Yarraberb and Bridgewater-Raywood roads in Raywood about 12.46pm.

"It could have been a catastrophe," Leading Senior Constable Marcus Uren said.

The driver of a Mitsubishi Pajero, which was towing a 20-foot caravan, will be issued with a penalty notice for failing to give way.

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Police said the Mitsubishi driver had been travelling east along Bridgewater-Raywood Road when he encountered a give way sign.

Leading Senior Constable Uren said the driver slowed the vehicle, but did not see a large semi-trailer heading north along Pyramid-Yarraberb Road.

The Mitsubushi attempted to travel through the intersection, causing the semi-trailer to take evasive action.

Leading Senior Constable Uren said the semi-trailer missed the Mitsubishi, which contained two people, but hit the caravan.

"The impact hit the towball system," he said.

The towball system ripped from the vehicle and the caravan was pushed into a nearby paddock.

Damage to both the caravan and the cabin of the semi-trailer was believed to have been extensive.

Leading Senior Constable Uren said all involved parties had been fully cooperative with police.

The Mitsubishi driver and his passenger had been travelling from interstate.

The speed limit on both roads was 100 kilometres per hour.

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