ASIC report finds car insurers failing to explain premium hikes, consumers urged to challenge increases
Consensus Summary
The Australian Securities and Investments Commission (ASIC) has released a report highlighting widespread failures by car insurers to transparently explain steep premium hikes, with increases outpacing inflation. Both ABC and Guardian confirm that premiums rose by 8% in the year to July 2025 or the 2025 financial year, following a 42% surge between 2019 and 2024. ASIC reviewed five insurers operating eight brands, finding that none adequately justified price changes in renewal notices, leaving customers unaware of factors like instalment fees or potential annual payment discounts. The regulator also noted that customers who challenged their premiums often secured better deals, with one in three receiving lower costs without policy changes. Legal action against RACQ in September 2025 for misleading practices underscores ASIC’s crackdown, while the Insurance Council of Australia (ICA) is now exploring clearer communication methods. The Guardian adds that claim costs rose 47% since 2020, and Choice estimates a 3.1% increase in the first four months of 2026, though the ABC focuses more on the broader trend of consumer dissatisfaction and loyalty penalties.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- Car insurance premiums increased by 8% in the year to July 2025, following growth of more than 42% between 2019 and 2024
- Car insurance premiums increased 8% in the 2025 financial year
- Five insurers selling policies under eight brands were reviewed by ASIC, collectively making up nearly three-quarters of the market
- Car insurance was the most complained about insurance product in 2024-25, with premiums being the primary reason for complaints
- ASIC found that insurers charging consumers more for instalment payments (weekly, fortnightly, monthly, or quarterly) did not clearly explain potential savings of 10–20% by paying annually
- About one in three customers who contacted their insurer before renewal got a lower premium without policy changes
- ASIC took legal action against RACQ in September 2025 for misleading renewal documents, following a $10 million fine in November 2023 for similar practices
- The Insurance Council of Australia (ICA) is exploring options to explain premiums more clearly to consumers
- Motor vehicle claim costs rose 47% since 2020 due to higher repair and parts costs
- General insurance was the most complained about financial product in the last financial year, with over half of complaints related to motor vehicle products
Points of Difference
Details reported by only one source:
- ASIC’s review found that renewal notices of the five insurers did not clearly explain why premiums rose more than inflation, leaving consumers in the dark
- The report also found that 40% of customers who renewed their policy did not contact their provider or compare quotes, with many believing it would not be worthwhile
- Almost one in three people who questioned their premiums ended up with a better deal, highlighting that loyalty does not pay
- ASIC is taking IAG-owned RACQ to court in September 2025 for misleading comparison pricing in renewal documents over more than five years
- Canstar’s annual car insurance report in June found the average comprehensive premium rose by 5% (or $111) over the past 12 months
- The federal government is planning to legislate standard definitions in premium notices, coinciding with ASIC’s report
- Consumer group Choice estimates premiums rose 3.1% in the first four months of 2026
- Canstar estimated the average comprehensive car insurance premium reached $2,460 in the year to June
- ASIC’s internal dispute resolution data shows general insurance was the most complained about financial product in the last financial year
- The insurers reviewed include AAMI, Suncorp Insurance, Allianz, NRMA, RACV, RAC, Youi, and Territory Insurance Office
Contradictions
Conflicting information between sources:
- The ABC states car insurance premiums increased by 8% in the year to July 2025, while the Guardian states the same increase occurred in the 2025 financial year (which may imply a different timeframe)
- The ABC mentions a 42% increase between 2019 and 2024, but the Guardian does not provide a comparable long-term percentage increase for the same period
Source Articles
'Loyalty doesn't pay': Car insurers asked to explain soaring premiums
The corporate regulator ASIC has taken aim at major car insurers, finding that the companies are not explaining why customers' premiums are rising faster than inflation.
Car owners should challenge insurers on steep price hikes and ‘call their bluff’, Asic says
Regulator finds many insurers raising premiums faster than inflation and advises customers to ask for better deals Get our breaking news email , free app or daily news podcast Car owners should challenge motor insurers over steep premium hikes, the corporate regulator advises, after finding many companies were raising prices faster than inflation. In a report released on Tuesday, the Australian Securities and Investments Commission (Asic) found that none of the eight insurers it reviewed adequat