Car insurance premiums have increased at a faster rate than inflation, according to ASIC. (
ABC News: Keana Naughton
)
ASIC says car insurance companies are on notice after a review found premiums soared far beyond inflation in the last year.
The corporate watchdog also found five insurers that sold policies under eight brands are not explaining why premiums rise.
The Insurance Council of Australia says it is exploring options to explain premiums to customers more clearly.
Car insurance companies are under pressure to explain what is driving sharp and sustained increases in premiums after a review by the corporate regulator found prices soared far beyond inflation last year.
The review, released by ASIC today, found motor vehicle insurance premiums increased by 8 per cent in the year to July 2025, following growth of more than 42 per cent between 2019 and 2024.
ASIC looked at eight insurance brands under five insurers, which collectively make up nearly three-quarters of the market, after seeing a significant increase in consumer complaints about the industry.
"Car insurance was the most complained about insurance product in 2024-25, and the biggest reason that people complained about their car insurance was premiums," ASIC commissioner Alan Kirkland said.
"This is a real source of consumer pain, and that's not a surprise given that many people are battling cost-of-living concerns.
The corporate watchdog found the renewal notices of the five insurance companies did not clearly explain why premiums were rising more than inflation, leaving consumers in the dark.
Source: ASIC 'Road testing transparency into car insurance premiums' report, August 2026
"[Insurers] tell us there are a range of reasons for these significant increases, but the problem is they're not explaining the reasons for those increases," Mr Kirkland said.
"That's important because people need to understand how much their premium has actually gone up, but also the reasons, because that may prompt them to push back on their insurer or shop around."
Insurers that charged consumers more when they paid in instalments (weekly, fortnightly, monthly or quarterly) did not make it clear in renewal notices that they could save between 10 and 20 per cent by paying annually.
The report also found that of the two-thirds of people who renewed their policy with their insurer, 40 per cent did not contact their provider or compare quotes, with many believing it would not be worthwhile or result in a lower premium.