Car insurers won’t explain your premium rise – here’s what you can do
Key takeaways
- ASIC found that none of the car insurers it reviewed clearly explained in quote or renewal documents why a customer's premium had changed.
- Of consumers who contacted their insurer before renewing, 31% secured a lower premium with no change to their cover.
- What's next: If your premium has risen, it's worth asking your insurer why or shopping around if you're not satisfied.
If you've ever stared dumbfoundedly at your car insurance renewal notice, you're not alone.
A new report from ASIC, that examined eight insurance brands across five insurers, found no insurer had clearly explained the key factors that determined how a customer's premium was calculated or why it had changed from the year before.
Customers who also opted to pay their premium in installments were also not adequately informed they could save up to 20%, just by paying annually.
And as the cost of living continues to put greater pressure on household budgets, ASIC Commissioner Alan Kirkland says it's time insurers do right by their customers.
"Consumers deserve to know why premiums are going up so they can decide whether to stay with their current insurer or shop around," he said.
'Most insurers gave only generic explanations in supplementary documents, with some providing no explanations at all. This fails to meet the needs of customers trying to understand the reasons for significant price increases."
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The review also highlighted how much that lack of clarity costs people.
ASIC also found 67% of consumers renewed the same type of policy with the same insurer. Of those, 40% didn't contact their insurer or compare quotes before renewing.
While many Aussies may assume reaching out to their insurer isn't worth the hassle, the data suggests otherwise.
Of the consumers who did contact their insurer before renewing, 31% managed to secure a lower premium without making any changes to their cover.
A pattern consumers are already pushing back on
ASIC's findings align with recent data from the Australian Financial Complaints Authority (AFCA), which highlighted comprehensive car insurance as the most complained about general insurance product in Australia in 2024-25, with 11,230 complaints lodged.
Misleading product or service information was the top complaint for the category.
If your premium has jumped, it's worth contacting your insurer to ask why and whether they can do better, especially given nearly a third of people who ask received a discount.
You can also compare your options by checking out Finder's car insurance comparison tool, which helps you compare quotes from more than 30 policies.
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