Why the secrecy around car insurance?

Every year, millions of Australians receive their car insurance renewal and promise themselves they’ll look at it properly later. Then life gets in the way, so they forget about it and the auto renew kicks in for another 12 months, leaving them none the wiser about changes to the policy or why their premium has gone up so much.

That was me too. 

When I did finally get round to it, I found my policy covered drivers aged 18 to 25, even though none of my children were old enough to drive. The car was only used for short trips yet I was paying for high kilometres. After calling around, making adjustments and bargaining hard, I saved more than 500 dollars a year on that single neglected bill.

I have spent my career negotiating commercial contracts, but my own major household expenses, including my car insurance, had fallen under the radar. While this was a bit confronting, I now know it's not unusual because while many of us have good intentions to shop around, in reality most of us don’t have the time or the knowledge base to do so; or, quite frankly, just have other things we’d rather do with our time.

ASIC’s new report into car insurance premium pricing shows why this matters. Motor vehicle insurance premiums rose 8 per cent in the year to July 2025, after jumping more than 42 per cent between 2019 and 2024. Yet none of the quote and renewal documents ASIC examined explained what determined a customer’s premium.

We see the new price, but not the factors behind it. We are not told how our address, kilometres, listed drivers, claims history or the insurer’s pricing model shaped the change.

ASIC found two thirds of motorists renewed the same type of policy with the same insurer, while 40 per cent neither contacted the insurer nor compared quotes.  Some might say that's loyalty, but our own research shows it's more likely to be confusion mixed with exhaustion. 

I know that asking for a better deal can work, and the report backs this up, showing 31 per cent of those who contacted their insurer paid a lower premium without changing their cover.

Our research points to the same problem. Of 1,000 Australians paying for car or home insurance, around a third said they felt that insurers were not transparent about cover, and lacked confidence that they understood their policy details and exclusions.

One of our team members should be a car insurer’s dream customer: she's over 50, the only driver and drives fewer than 8,000 kilometres a year. Recently her insurer declined to renew her policy because she had made “too many claims”. Thinking it must be an error she requested a review. A few weeks later she was contacted to say that the underwriter had considered her case and that the answer was still no due to a grand total of two claims in three years, both made after her parked car was slightly damaged by other drivers.

Insurers can assess risk but customers deserve to know how two no-fault incidents might become grounds for non-renewal and how competitors might treat the same history. Too often the logic stays invisible even when the premium jumps or cover disappears.

Every health insurer must provide standardised information to PrivateHealth.gov.au, where consumers can compare every policy available in Australia. They can also use comparison services or go directly to the insurer. Your electricity bill must tell you if your retailer has a cheaper plan available. 

Car insurance appears in a limited way through some comparison businesses or is based on an overall star rating or awards. Consumers often still end up visiting multiple sites, answering the same questions repeatedly and trying to decode policies that are difficult to compare like for like.

But comparing is not only possible, it’s commonplace in other markets. In the UK, government research found 84 per cent of people shopping for car insurance had used a comparison website. The more this is normalised and the more insurers get on board, the greater the visibility for consumers, promoting more competition on price, cover and service.

If you are thinking, “Of course the CEO of a comparison service wants more insurers to embrace comparison”, you are absolutely right. We would welcome the business. So would our competitors. More importantly, customers would welcome the choice. 

Australia needs renewal notices showing the old and new premium, insured value, excess, kilometre band, listed drivers and material cover changes side by side. Customers should be told why the price increased and what they could change to reduce it.

The cheapest policy will not always be the best. Proper comparison must include cover, exclusions, service and claims performance as well as price.

Competition only works when customers can see what they are buying. Australians shouldn’t need an afternoon and a spreadsheet to work out whether their car insurance policy still fits their life.