Car Insurance Hikes: ASIC Urges Drivers to Challenge Premiums 2026

Car insurance premiums are rising faster than inflation, and ASIC now urges car owners to challenge insurers on steep price hikes and 'call their bluff' for better deals. The corporate regulator's report reveals poor transparency across the sector, leaving many drivers overpaying without realizing it. If you're facing a premium increase, this guide shows you how to fight back and save money.

Why Car Insurance Premiums Are Rising

According to ASIC, car insurance premiums increased by 8% in the 2025 financial year, far outpacing inflation. Consumer group Choice estimates they rose another 3.1% in just the first four months of 2026. Comprehensive car insurance premiums now average $2,460 per year, up $111 from last year, based on Canstar data.

These hikes are hitting household budgets hard, yet insurers often fail to explain the reasons behind the increases. ASIC found that none of the eight insurers reviewed adequately explained premium calculations to customers in quote or renewal documents.

Key Findings from ASIC's Report

• Most insurers give only generic explanations for premium changes, some provide none.
• About 1 in 3 customers who contact their insurer before renewal get a lower premium without policy changes.
• Five insurers charge 10-20% less for annual payments versus instalments, but don't make it clear.

How to Challenge Your Car Insurance Increase

ASIC Commissioner Alan Kirkland advises policyholders to 'call their bluff' – demand answers, challenge the increase, and ask for a better deal. Insurers often bank on customers not taking action, so a simple phone call can yield significant savings.

Start by reviewing your renewal notice for any changes in coverage or discounts. Then contact your insurer and ask specific questions about why the premium rose, what factors influenced the price, and whether they can offer a lower rate.

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Tips for Lowering Your Car Insurance Premium

Beyond calling your insurer, compare quotes from other providers. Loyalty doesn't always pay – switching can save you hundreds. Also, consider increasing your excess, bundling policies, or asking about discounts for safe driving or low mileage.

Review your coverage annually to ensure you're not paying for unnecessary extras. If you've had no claims, ask for a no-claim bonus. Many insurers offer better rates for long-term customers who negotiate.

What to Say When You Call

Be direct and polite. Say: 'I received my renewal notice and the premium increased significantly. Can you explain why? I've been a loyal customer and I'd like a better rate, otherwise I'll consider switching.' This often prompts insurers to offer discounts or match competitor prices.

Why Transparency Matters

ASIC's report highlights a systemic issue: insurers are not being upfront about pricing. This lack of transparency puts consumers at a disadvantage. By challenging increases, you not only save money but also push the industry toward fairer practices.

Remember, insurance is a competitive market. You have the right to shop around and demand value. Don't accept a premium hike without question – take action today.

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