Car insurance premiums surge nearly 60% in four years, ASIC report finds

Government pledges $2.4 million for insurer transparency as industry blames rising repair costs and skills shortages

By LineZotpaper

Published16 October 2026

Read Time3 min

Sources2 outlets

Australian motorists face another year of double-digit premium increases, with comprehensive car insurance costs rising almost 60% since 2023 and nearly doubling since 2020, according to a journalist's analysis that mirrors broader industry trends flagged by the corporate regulator.

Comprehensive car insurance premiums continue to climb well above inflation, with one policyholder's bill rising 10% in the past year alone, following a similar increase the year before. The same station wagon insured for $703 in 2023 now costs $1,110, a 57% jump over four years. Since 2020, the premium has risen 96% from $566.

An Australian Securities and Investments Commission (ASIC) report released in August found premiums had surged more than 42% from 2019 to 2024, with a further 8% increase in the 12 months to July 2025. The report also revealed that insurers were not detailing how premiums were calculated, and 73% were only giving generic reasons for rate increases.

Federal Assistant Treasurer and Minister for Financial Services Daniel Mulino said the government had committed $2.4 million to reforms aimed at improving insurer transparency. "While this work is targeted at home and contents insurance at this stage, the government is considering the issue of premium transparency in the motor insurance market," he said. "I have also called on the industry to step up with fairer pricing, greater transparency, and better value for Australians."

The Insurance Council of Australia attributed the rising premiums to sharp increases in claim costs, noting the average motor claim had risen 32% to $6,266 over the four years to 2026 due to higher vehicle replacement costs, parts and labour expenses, and longer repair times. A spokesperson said this was "caused by national parts and skills shortages, and the specialised equipment and expertise modern vehicles require." The council called on governments to regulate the credit hire industry, address repair workforce shortages, and require manufacturers to make spare parts available in Australia.

The government pointed to its Free TAFE program, which has surpassed 850,000 enrolments since 2023 and is being made permanent with at least 100,000 fee-free places annually from 2027. However, the Motor Trades Association of Australia reported last month that the vacancy fill rate for automotive workers was just 48%, with average applicants per job falling from 8.2 in 2024 to three in 2026. It estimated a 38,000-person shortfall in automotive trade professionals and technicians and called for automotive trades to be recognised as a priority occupation.

Analysis

Why This Matters

Australian motorists face rapidly rising insurance costs that far outpace general inflation, adding to cost-of-living pressures.
The transparency gap identified by ASIC means consumers have little ability to compare or challenge pricing, with most insurers providing only generic justifications.
Skills and parts shortages in the automotive sector are driving up claim costs, creating a structural problem that cannot be solved by insurance regulation alone.

Background

Car insurance premiums in Australia have risen sharply since the early 2020s, driven by increasing costs of vehicle repairs, parts, and labour. Modern vehicles require specialised equipment and expertise, exacerbating shortages of qualified technicians. Federal and state governments have introduced training programs to address the skills gap, but industry bodies report persistent shortfalls. The ASIC report in August 2025 highlighted poor transparency in premium setting, prompting a government response focused initially on home and contents insurance.

Key Perspectives

Motorists: Facing significant and repeated premium increases, often with no clear explanation from insurers beyond generic references to rising costs. Insurance industry (Insurance Council of Australia): Argues premiums reflect genuine increases in claim costs, driven by parts shortages, labour gaps, and higher vehicle complexity. Calls for government action on credit hire regulation and spare parts availability. Government and regulators: Pushing for greater transparency through a $2.4 million reform package, currently targeted at home insurance but under consideration for motor insurance. Promotes skills training via the Free TAFE program as a long-term solution to repair workforce shortages.

What to Watch

Whether the government extends premium transparency reforms to the motor insurance market, and what specific requirements are imposed.
Industry progress on addressing the 38,000-person shortfall in automotive trades, including the impact of Free TAFE on vacancy fill rates.
Further ASIC or ACCC scrutiny of insurer pricing practices, particularly the prevalence of generic rate increase explanations.

Sources

Car insurance premiums increase almost 60pc in four years — Latest business news
Car insurance premiums increase almost 60pc in four years — Just In