Australian car insurers fail to explain premium hikes

Motor premiums rose more than 42% from 2019 to 2024.

Australian car insurers are failing to explain the factors behind sharp and repeated premium increases, making it harder for consumers to compare policies and challenge higher prices, the Australian Securities and Investments Commission (ASIC) has found.

Motor vehicle insurance premiums rose 8% in the 12 months to July 2025, above inflation, after increasing by more than 42% between 2019 and 2024.

ASIC’s review, detailed in Report 838, examined eight insurance brands across five insurers, representing about 72% of the market. 

It also included research involving more than 2,000 Australians.

ASIC Commissioner Alan Kirkland said consumers should be able to understand why their premiums were increasing, particularly as households faced higher living costs.

The review found none of the insurers examined explained the key factors used to calculate premiums in their quote and renewal documents, or why those factors had changed from the previous year.

Most insurers provided only generic explanations in supplementary documents, whilst some provided no explanation at all, ASIC said.

The regulator also found that insurers charging more for instalment payments did not clearly state in renewal notices that customers could save up to 20% by paying their premiums annually.

Price was the most important factor for 37% of consumers when deciding whether to purchase or renew a policy.

ASIC found 67% of consumers renewed the same type of policy with the same insurer. Of those, 40% did not contact their insurer or compare quotes before renewing, with many saying they did not think doing so would be worthwhile or result in a lower premium.

However, consumers who challenged their renewal prices were often able to secure savings. 

Amongst those who contacted their insurer before renewing, 31% had their premium reduced without changing their cover.

Kirkland said the finding showed that asking insurers to reconsider a premium could result in a lower price, but not all consumers had the time, confidence or knowledge to negotiate.

ASIC is calling on insurers to improve quote and renewal documents by making premium information clearer, more useful and easier for consumers to compare.