Car owners should challenge insurers on steep price hikes and ‘call their bluff’, Asic says

Asic Urges Drivers to Question Skyrocketing Car Insurance Costs

Regulator Finds Premium Increases Outpace Inflation Without Clear Explanation

Wanderstayfinder.com – Australian motorists facing substantial increases in their car insurance bills have been advised to push back against their providers. The corporate watchdog has identified that numerous insurance companies are hiking premiums at rates significantly exceeding general inflation, yet failing to provide adequate justification for these price adjustments.

The Australian Securities and Investments Commission published its findings on Tuesday, revealing that every one of the eight insurers examined did not sufficiently clarify the methodology behind premium calculations. Furthermore, these companies neglected to explain why prices shifted within quotation or renewal paperwork provided to policyholders.

Most insurers gave only generic explanations in supplementary documents, with some providing no explanations at all.

Commissioner Alan Kirkland highlighted this communication gap as a significant concern for consumers navigating an increasingly expensive insurance landscape.

Premium Growth Exceeds Economic Trends

Motor insurance has emerged as one of the most substantial household expenditures in recent years, contributing notably to inflationary pressures. Despite this prominence, the sector has experienced considerably less regulatory examination compared to other consumer-facing industries like grocery retail.

While most families cannot avoid these costs entirely, the rate of increase has accelerated beyond typical economic trends. Data from Asic indicates that car insurance premiums climbed by eight percent during the 2025 financial year, substantially outstripping broader inflation figures.

Consumer advocacy organization Choice calculated that premiums surged by three point one percent within merely the first four months of 2026 alone. Canstar’s analysis suggests comprehensive car insurance premiums increased by one hundred and eleven dollars over the year ending in June, reaching an average of two thousand four hundred and sixty dollars.

Hidden Discounts and Poor Transparency

The regulator’s investigation uncovered widespread opacity regarding pricing across the insurance sector. Although specific company names were not individually identified in each finding, the patterns were clear.

Approximately one in three customers who proactively contacted their insurer prior to renewal received a reduced premium without any modifications to their coverage. Kirkland noted that insurers rely heavily on customer inaction when implementing price increases.

The insurers bank on a lot of their customers not taking any action when they get a premium increase. You should call their bluff – demand answers, challenge them on the increase and ask for a better deal.

Five of the surveyed providers offered discounts ranging from ten to twenty percent when customers chose annual payment over instalments. However, none of these companies highlighted these savings prominently in their renewal notifications.

Kirkland criticized the disclosure practices, stating they prevented customers from fully understanding, questioning, or comparing premium adjustments. He emphasized that there was no valid reason for some insurers to fail communicating such fundamental benefits to their clientele.

Renewal Document Flaws

The report identified specific deficiencies in how renewal notices were structured. Five companies failed to display comparisons with the previous year regarding insured value or excess amounts. Another provider scattered historical and current costs across multiple pages, complicating straightforward price comparisons for consumers.

The Insurance Council of Australia indicated it was investigating methods to improve premium clarity for customers. The industry body noted that motor vehicle claim expenses have escalated by forty-seven percent since 2020, driven by rising repair and parts costs.

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.

Rising Consumer Dissatisfaction

Customer frustration with car insurance has been climbing steadily. Asic’s internal dispute resolution statistics revealed that general insurance became the most frequently complained-about financial product throughout the financial services sector during the last financial year.

Over half of all general insurance complaints concerned motor vehicle products, with premium pricing emerging as the primary grievance area.

The eight insurers whose comprehensive and third-party car insurance renewal and disclosure documents underwent review included AAMI, Suncorp Insurance, Allianz, NRMA, RACV, RAC, Youi, and Territory Insurance Office. All were contacted for their response to the findings.

What Drivers Can Do

The regulator’s message is clear: consumers should not passively accept premium increases. By actively engaging with their insurers, questioning the rationale behind price hikes, and exploring alternative providers, drivers can potentially secure better value for their coverage.

The findings underscore the importance of transparency in an industry where customers often feel powerless to influence pricing. With claim costs continuing to rise, insurers must find ways to communicate these changes effectively while offering genuine discounts to loyal customers who take the initiative to challenge their providers.