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

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 adequately explained the reasons behind premium calculations to customers or why prices had changed in quote or renewal documents.“Most insurers gave only generic explanations in supplementary documents, with some providing no explanations at all,” the Asic commissioner Alan Kirkland said.Insurance premiums have been a major household expense and inflation trigger in recent years, although the industry has not faced the same sort of scrutiny as other consumer sectors, such as supermarkets.Premiums are an unavoidable cost for most households but are rising faster than most prices in the economy.car insurance premiums increased 8% in the 2025 financial year, according to Asic, far outpacing inflation. Consumer group Choice estimates that they rose 3.1% in just the first four months of 2026.Comprehensive car insurance premiums rose by $111 in the year to June, to $2,460 on average, Canstar has estimated.Asic’s report uncovered poor price transparency across the sector, although it did not identify the companies in each case.The regulator found that about one in three customers who contacted their insurer before they renewed got a lower premium without any change to their policy.“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.”Instalment premiumFive of the insurers surveyed charged consumers 10% to 20% less if they paid their premium annually instead of in instalments, although none made the savings clear in the renewal notices, according to the regulator.Kirkland said the companies’ disclosure practices stopped customers from understanding, challenging or comparing premium increases.“There is no excuse why some insurers cannot communicate such a basic benefit to customers,” Kirkland said.skip past newsletter promotionafter newsletter promotionFive of those surveyed failed to show previous-year comparisons for insured value or excess on renewal notices. Another scattered past and present costs across different pages, making price comparisons difficult.The Insurance Council of Australia said it was exploring options to explain premiums more clearly to customers.The representative body said motor vehicle claim costs had risen 47% since 2020 amid higher costs for repairs and parts.“Insurers recognise the need to support customers to understand what they are paying and why,” a spokesperson said.“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 has been on the rise.Asic’s internal dispute resolution data shows that general insurance was the most complained about financial product across the financial services industry last financial year.More than half of general insurance complaints related to motor vehicle products, with premiums the most complained about issue.AAMI, Suncorp Insurance, Allianz, NRMA, RACV, RAC, Youi and Territory Insurance Office had their comprehensive and third‑party car insurance renewal and disclosure documents reviewed as part of the report.The insurers were contacted for comment.