The Australian Securities and Investments Commission (Asic) has advised car owners to challenge motor insurers over steep premium increases, following a report that found many companies were raising prices faster than inflation. The regulator's report, released on Tuesday, revealed that none of the eight insurers reviewed adequately explained premium calculations or price changes in quote and renewal documents.
Regulator's findings on transparency
Asic commissioner Alan Kirkland stated that most insurers provided only generic explanations in supplementary documents, with some offering no explanations at all. The report highlighted poor price transparency across the motor insurance sector, although it did not name specific companies in each case. Kirkland emphasized that insurers often rely on customer inaction, noting that about one in three customers who contacted their insurer before renewal received a lower premium without any policy changes.
"The insurers bank on a lot of their customers not taking any action when they get a premium increase," Kirkland said. "You should call their bluff – demand answers, challenge them on the increase and ask for a better deal."
Rising premiums outpace inflation
Insurance premiums have become a major household expense and inflation trigger in recent years, yet the industry has not faced the same scrutiny as other consumer sectors like supermarkets. Premiums are an unavoidable cost for most households but are rising faster than most prices in the economy. According to Asic, car insurance premiums increased 8% in the 2025 financial year, far outpacing inflation. Consumer group Choice estimates that premiums rose 3.1% in just the first four months of 2026. Canstar calculated that comprehensive car insurance premiums rose by $111 in the year to June, reaching an average of $2,460.
Instalment savings hidden
The regulator found that five of the insurers surveyed charged consumers 10% to 20% less if they paid their premium annually instead of in instalments, but none made these savings clear in renewal notices. Kirkland criticized this practice, stating that disclosure practices stop customers from understanding, challenging, or comparing premium increases. "There is no excuse why some insurers cannot communicate such a basic benefit to customers," he added.
Additionally, five insurers failed to show previous-year comparisons for insured value or excess on renewal notices, and one scattered past and present costs across different pages, making comparisons difficult.
Industry response and customer complaints
The Insurance Council of Australia said it was exploring options to explain premiums more clearly, noting that motor vehicle claim costs had risen 47% since 2020 due to higher repair and parts costs. A spokesperson said, "Insurers recognise the need to support customers to understand what they are paying and why. This is a highly competitive market, and we encourage every customer to talk to their insurer and shop around at renewal."
Customer dissatisfaction with car insurance is on the rise. Asic's internal dispute resolution data shows that general insurance was the most complained-about financial product in the financial services industry last financial year. More than half of general insurance complaints related to motor vehicle products, with premiums being the most complained-about issue.
Insurers reviewed
The report reviewed comprehensive and third-party car insurance renewal and disclosure documents from AAMI, Suncorp Insurance, Allianz, NRMA, RACV, RAC, Youi, and Territory Insurance Office. These insurers were contacted for comment but had not responded at the time of publication.
