Australian Car Insurance Has Jumped Almost 60% in Four Years — Why?

Some Australian motorists have seen comprehensive car insurance premiums jump almost 60% in four years, adding hundreds of dollars to annual household bills. But the widely reported figure comes from an individual renewal example—it is not an official national average. Australia’s corporate regulator has separately confirmed large industry-wide increases and warned that insurers are failing to explain how they calculate premiums.

On 16 October 2026, ABC News reported a comprehensive motor-insurance renewal that increased from around A$703 in 2023 to A$1,110 in 2026, described as a roughly 57% increase. Its owner had maintained a strong safe-driving record, highlighting why drivers may be shocked by renewal quotes even without a recent claim.

Australia-wide evidence is broader, but measures different periods: in August, the Australian Securities and Investments Commission (ASIC) cited motor premium increases of more than 42% from 2019 to 2024 and a further 8% in the 12 months to July 2025. Those numbers should not be combined casually or relabelled as a 2022–26 national increase.

Published 16 October 2026. Unless otherwise stated, figures are in Australian dollars. Actual premiums depend on the vehicle, driver, address, cover and insurer.

Why car insurance costs keep rising

Comprehensive insurers set premiums to cover expected claims, repair or replacement costs, operating expenses, reinsurance, catastrophe risk, taxes and their target return. The price paid by a particular household also reflects the risks associated with the vehicle, driver and location. Several underlying costs have moved sharply higher.

1. Repairs and replacement vehicles cost more

Modern cars use cameras, sensors, sophisticated headlights, calibrated driver-assistance systems and increasingly expensive body panels. A minor collision can require specialist labour and calibration work that did not apply to older models. Replacement vehicle values and higher parts prices also feed into insurer claim costs.

In the ABC’s 16 October report, an Insurance Council of Australia spokesperson said the average motor claim had risen 32% to A$6,266 over four years to 2026, citing replacement vehicles, parts, labour and longer repair times. These are industry-supplied figures reported by ABC, not calculations made by NextNews.

2. Skills shortages increase workshop costs

Automotive repairs increasingly require trained technicians, especially for electrical, safety and software-related systems. Recruitment difficulties can increase hourly labour charges and keep vehicles off the road for longer. A longer repair period can also increase claim-related hire-car and transport costs.

3. Severe weather and other risks

Floods, hailstorms and bushfires can damage many vehicles in the same location. Insurers consider the probability and cost of future losses, while reinsurance and capital costs can rise after severe events. Premiums therefore vary by postcode and risk exposure, but not every renewal increase can be attributed to an individual disaster.

4. Theft and vehicle-specific repair complexity

Different vehicle makes and models can vary significantly in theft risk, available parts, repair methods and replacement value. Two people with the same driving record but different cars may receive very different quotes. EVs, hybrids and conventional vehicles each involve distinct repair considerations; it would be inaccurate to claim that every electric vehicle costs more to insure.

5. The insurer’s own price and risk decisions

Insurers also revise assumptions about claims, competitive positioning, administration costs and the expected profitability of policies. A particular customer’s increase need not match national industry inflation. ASIC is scrutinising how these decisions are disclosed to consumers.

What ASIC found about motor insurance transparency

In Report 838, released on 11 August 2026, ASIC examined eight insurance brands across five insurers, covering approximately 72% of the market, alongside research involving more than 2,000 Australians.

Its central concern was not simply the level of premiums. ASIC found that none of the insurers reviewed clearly explained in their quote and renewal documents the key factors affecting premium calculation or how those factors had changed from the previous year.

ASIC consumer finding	Result	Why it matters
Consumers remaining with the same insurer	67%	Renewal inertia may reduce comparison-shopping pressure.
Consumers who did not shop around or compare	40%	Some missed the opportunity to find a better policy.
Consumers recalling only generic reasons for price rises	73%	Many could not identify why their particular premium changed.
Consumers contacting an insurer who obtained a lower premium	31%	Calling and asking questions can sometimes help.
Potential extra cost of instalments	10–20% with many insurers	Paying monthly can materially increase the total cost.

These percentages refer to ASIC’s specified research groups and insurance practices; they do not mean 31% of all policyholders automatically receive a discount, or that every insurer imposes a 20% instalment loading. ASIC also noted that some consumers underestimate the potential cost of paying by instalments.

Commissioner Alan Kirkland said insurers needed to be more informative, and ASIC indicated it would act where disclosures were inaccurate or misleading. The review considered disclosure practices rather than determining that every individual premium was unlawfully priced.

Nearly 60% in four years: a real example, not the national average

The ABC described a policy that cost A$703 in 2023 and A$1,110 for its latest renewal. That is an increase of A$407, or approximately 58% when calculated from the two published rounded amounts. The report characterised it as about 57%, likely reflecting the exact bill figures or dates.

For the same vehicle, its 2020 premium was reported at A$566, making the 2026 renewal approximately 96% higher over that longer period. Other drivers will have different histories and risks, so readers should not assume the ABC example represents what all Australian motorists pay.

By contrast, ASIC’s 42%-plus increase between 2019 and 2024 and subsequent 8% rise cover broader market datasets and different time windows. Both the individual anecdote and the wider statistics are useful—but they answer different questions.

How to check whether your renewal is good value

1. Compare like-for-like cover: use the same type of policy, excess, agreed or market value, driver details, exclusions and accessories when evaluating quotes.
2. Read the full renewal notice: identify the premium, government charges, compulsory excess, optional excess, instalment loading and any changes in insured value.
3. Get multiple quotes: comparing several insurers can reveal material differences for similar cover. Be truthful and consistent in application details.
4. Ask why the premium changed: contact the insurer and request a clear explanation; asking does not guarantee a discount.
5. Test annual versus monthly payments: calculate the full amount paid over 12 months, including fees and instalment premiums.
6. Review optional extras: consider whether hire-car, windscreen, roadside assistance or other products are worth their cost.
7. Check the excess carefully: increasing the excess can lower the premium but exposes you to more out-of-pocket cost if you claim.
8. Consider value and usage: ensure declared drivers, annual kilometres, parking details and vehicle value remain accurate.
9. Do not cancel essential cover prematurely: confirm replacement cover is active and understand any lender, lease or finance obligations.

A cheaper quote is not automatically a better product. The practical comparison is the total premium, exclusions, limits, excesses and claim service, not one headline figure.

Comprehensive insurance, third-party property cover and CTP explained

Australians often confuse three types of motor insurance:

• Compulsory Third Party (CTP): covers certain personal injury liabilities from motor accidents. Its arrangements differ across states and territories. It does not usually pay to repair the other car’s property damage.
• Third-party property damage: generally provides cover for damage you cause to someone else’s vehicle or property, subject to policy terms, but usually does not cover your own car.
• Comprehensive car insurance: generally covers your vehicle for specified accident, theft, weather and other events as well as third-party property liability, subject to the policy’s limits and exclusions.

Comprehensive insurance may be required under some vehicle finance agreements. Reducing cover to save on premiums can create a much larger financial exposure after a claim, so the decision depends on the car’s value, personal resources and contractual requirements.

Worked example: an increase that looks smaller by instalment

Suppose a policy costs A$1,100 if paid annually. An equivalent policy costing 10% more across instalments would total A$1,210—an extra A$110 over the year. At a 20% difference, the total becomes A$1,320—an extra A$220. This is a mathematical illustration of potential payment-method differences cited by ASIC, not a quote from a particular insurer.

The same principle applies to an excess: choosing an extra A$500 excess for a small premium saving may be costly if a claim occurs. The correct comparison depends on the likely savings, ability to fund a claim and policy conditions.

What happens if your insurer won’t explain a sharp increase?

Ask the company for a written explanation of the relevant rating factors, whether the insured value has changed, and whether fees or optional cover have been added. Keep copies of renewal notices and communications.

If there is a dispute about incorrect information or how the policy has been administered, use the insurer’s internal dispute resolution process. Eligible unresolved complaints may be escalated to the Australian Financial Complaints Authority (AFCA). A complaint mechanism does not give consumers a general entitlement to insist on any preferred market price, but it can address disputes about conduct and decisions within its remit.

For public guidance, consult ASIC Moneysmart’s car insurance information and the ACCC’s pricing advice.

What might change after ASIC’s review?

The Australian Government has discussed work to improve insurance pricing transparency. ABC reported the Assistant Treasurer’s statement that A$2.4 million had been committed to reforms initially focused on home and contents insurance, while motor-insurance transparency was also being considered.

The existence of a review or funding announcement does not mean that a rule requiring all insurers to publish a detailed formula is already in force. The key questions are whether future disclosures become more meaningful and whether competition helps slow underlying price increases.

Frequently asked questions

Have all Australian car insurance premiums risen 60% since 2022?

No. Nearly 60% refers to particular reported renewals. Broader industry figures from ASIC cover other periods and show substantial increases but not that exact nationwide four-year rate.

Why can my premium rise without any claims?

Insurers price expected future risk and claims costs, not only your personal claims history. Repair costs, local risks and insurer assumptions can change.

Is it cheaper to pay annually?

Often, but check the total quote. ASIC found that paying in instalments could cost 10–20% more with many insurers.

Will raising my excess always save money?

It can reduce a quote but increases the amount you pay if you claim. The overall value depends on your circumstances and terms.

The NextNews takeaway

Rising repair costs, claims expense, labour shortages and other risks are important drivers of premiums. Yet ASIC’s disclosure review shows consumers often receive inadequate explanations of individual increases. The most useful action is to compare genuinely equivalent cover and question the renewal—without mistaking one motorist’s 57–58% increase for the national average.

For more Australian household-cost context, read our cost-of-living and household spending report and September employment and interest-rate analysis.

AI-generated image created for NextNews. The featured image is a conceptual graphic about vehicle insurance costs, not a genuine customer quote, insurer advertisement or verified image of a particular vehicle.

Official sources and further information

• ASIC: Consumers left in the dark about rising car insurance premiums (11 August 2026)
• ASIC: Report 838 on motor premium transparency
• ABC News: Individual 57% renewal increase and motor repair cost reporting (16 October 2026)
• ASIC Moneysmart: Car insurance consumer guide
• AFCA: Insurance complaints process

Independent-advice disclaimer: This report provides general consumer and financial information only, not personal insurance, financial, legal or investment advice. Premiums, covers, excesses, taxes and eligibility vary by insurer, product, state and individual circumstances. Illustrations are not insurance quotes or guarantees. Read the relevant Product Disclosure Statement and Target Market Determination and seek qualified independent advice where required before buying, changing or cancelling insurance. See the NextNews disclaimer.