Car insurance premiums: up 42%, and insurers don't say why

Car insurance premiums in Australia rose more than 42% between 2019 and 2024, then another 8% in 2024-25. When the corporate regulator, ASIC, checked how insurers explain those rises, it found that none of the insurers it reviewed explained, in their quotes or renewal notices, what drove the price or why it had changed from last year.

So the bill goes up, and the letter doesn't say why.

How much car insurance premiums have gone up

The insurers' own industry body, the Insurance Council of Australia, says comprehensive premiums were up 42% since 2019, reaching an average of $1,052 a year in 2024.

Canstar measures something different: quotes, not the Insurance Council's average, so its dollar figures are higher and the two can't be compared. Its 2026 ratings, based on more than 56,000 quotes, put the average comprehensive premium at $2,460 a year, up 5% ($111) on 2025. Victorian drivers pay the most, at an average of $3,293. Drivers aged 50 and over had the biggest rise: 10%.

It is also faster than prices in general. The ABS says insurance prices rose 5.6% in the 12 months to August 2026, against 4.0% for Australia's inflation rate overall. For many households it lands in the same months as a bigger power bill.

Loyal customers paid for it

Car insurance prices rose an average of 8% in 2024-25. But CHOICE found the price of new policies over the same period was flat: "the price rise came entirely from policy renewals by loyal customers."

In other words, the people who stayed put paid for it. CHOICE also compared prices for new customers in January 2025 and January 2026: on average they rose 4.4%, but the change was very different from one insurer to the next:

What ASIC found when it checked car insurers

ASIC reviewed eight brands from five insurers, covering about 72% of the car insurance market: AAMI and Suncorp (AAI Limited), Allianz and TIO (Allianz Australia), NRMA and RACV (IAG), RAC Insurance and Youi. It also surveyed more than 2,000 Australians. Its report, released on 11 August 2026, found:

• No explanation of the price. No insurer explained, in quote and renewal documents, the key factors behind the premium or why it had changed from the year before. Two insurers' renewal notices gave no reason at all; the other six gave generic ones.
• Generic reasons, usually "rising costs". Of the people who remembered being given a reason for a price rise, 73% got a generic one, typically rising costs.
• Paying monthly costs more, and they don't say how much. Five of the eight insurers charged 10–20% more to pay by instalments than to pay annually, and renewal notices didn't make that saving clear.
• Most people just renew. Two-thirds (67%) renewed with the same insurer, and 40% of them neither contacted their insurer nor compared quotes.
• Asking works. Only 30% of people contacted their insurer about the renewal. About 31% of those had their premium cut without changing their cover.

That last finding is the one ASIC itself flagged: it "raises concerns about the fairness of insurers' pricing practices, as not all consumers have the time, capability or confidence to negotiate with their insurer".

General insurance is also the financial product Australians complain about most. ASIC says it was the most complained-about financial product in 2024-25 (37% of complaints), more than half of those were about comprehensive car insurance, and the most common complaint was premiums.

ASIC commissioner Alan Kirkland said, as reported by the ABC: "What we found is that insurers across the board are falling short," and "This also shows that loyalty doesn't pay."

Why is car insurance so expensive? The insurers' answer

A smash repair and mechanical workshop in Coolah, NSW. Photo: Mattinbgn, CC BY 3.0, via Wikimedia Commons.

The insurers say it's their costs, not their profits. The Insurance Council says:

• the average claim cost rose 42% between 2019 and 2024, tracking premiums
• repair costs climbed 26% from 2022, and repairs are about 60% of claim costs
• new car prices are up as much as 39% since 2019 and used cars about 32%, which raises payouts for write-offs
• rental car costs for insurers rose 70% since 2019, partly because repairs take longer, and claims involving "credit hire" companies have quadrupled
• motor claims and costs went from 89% of premiums collected in June 2019 to 94% in June 2024, which it says shows the product became less profitable

In October 2026 it said, as reported by the ABC, that the average motor claim had risen 32% to $6,266 over four years, and that "The most effective way to ease pressure on premiums is to tackle the costs driving them." It wants governments to regulate the credit hire industry, address repair workforce shortages, and require manufacturers to make spare parts available in Australia.

Those cost pressures are real. But they don't explain why a loyal customer pays more than a new one, or why a renewal notice can't say what changed.

What's being done about it

Not much, on price. ASIC doesn't set premiums. "We don't regulate the prices that insurers offer to their customers," Mr Kirkland said. It is giving each insurer in the review feedback and says it will take enforcement action where premium disclosures are inaccurate or misleading. It is already in court against RACQ Insurance, alleging that at least 475,000 renewal documents sent over more than five years contained misleading premium comparisons. Those are allegations; the case is ongoing.

The federal government has committed $2.4 million to reforms to make insurance pricing more transparent, but that work is aimed at home and contents insurance for now. Assistant Treasurer Daniel Mulino said the government "is considering the issue of premium transparency in the motor insurance market."

How to pay less for car insurance

ASIC's own findings point to what works:

1. Call your insurer before you renew. About 31% of people who did got a lower premium for the same cover.
2. Pay annually if you can. Paying monthly cost 10–20% more with five of the eight insurers ASIC reviewed.
3. Compare quotes. Canstar estimates a driver paying the average premium could save about $651 a year by switching to one of its top-rated policies.
4. Check the renewal notice against last year's: the insured value, the excess and the kilometres.

Premiums are up by more than half in six years, and the regulator found that the letter telling you so doesn't explain why. Ring your insurer before you renew.

Has your car insurance jumped at renewal? Send us your renewal notice.

Top photo: morning traffic on Melbourne's Eastern Freeway. Photo: BlackCab, CC BY-SA 3.0, via Wikimedia Commons.