Urgent Reforms Needed to Curb Rising Motor Insurance Premiums

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

This call to action follows a striking 42% increase in comprehensive motor insurance premiums since 2019, with the average premium now reaching $1052 annually. The underlying cause is attributed to escalating input costs that have outpaced compensatory measures by insurers. These rising costs have also led to a decline in insurer profitability, as evidenced by the increase in claims costs ratio from 89% to 94% over the past six years.

Andrew Hall, CEO of the ICA, emphasized the industry's commitment to cutting expenses through various internal measures like optimizing operations and enhancing the repair workforce's skills. However, he points out that many cost drivers extend beyond the insurance industry's control, necessitating decisive government-led reforms.

The proposed reforms by the ICA aim to tackle multiple areas:

• Alleviating skills shortages in motor trades by expanding skilled migration pathways, increasing investment in training for electric vehicle repairs, and boosting apprenticeship completion rates.
• Enhancing the automotive supply chain’s resilience by ensuring independent repairers have access to essential parts and obligating manufacturers to guarantee part availability.
• Regulating credit hire and accident management companies to protect consumers from misleading practices and inflated prices.
• Implementing regulations on towing and storage fees, following Queensland's model to cap excessive charges and effectively enforcing reforms like WA’s Towing Services Bill 2024.
• Strengthening efforts to combat insurance fraud by improving collaboration between insurers and law enforcement and enhancing fraud detection initiatives.
• Revising written-off vehicle rules in NSW to allow repairable vehicles to be re-registered after passing stringent safety checks, aligning them with practices in other states.

The ICA's proposed roadmap highlights necessary steps to streamline processes, eliminate systemic inefficiencies, and deliver fairer costs across the insurance landscape, thereby relieving pressure on consumers. The suggested interventions, if adopted, could lead to a more sustainable and balanced market, benefiting both insurers and policyholders.

Published:Tuesday, 25th Mar 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

Queensland Farmers' Market Threatened with Eviction Over Insurance Dispute

23 Apr 2026: Paige Estritori

In a developing situation in south-east Queensland, the Three Creeks Farm Stall, a popular farmers' market operating in Eileen Hose Park near Gympie, is facing potential eviction due to a dispute over public liability insurance requirements imposed by the Gympie Regional Council. - read more

Record Surge in Insurance Complaints Due to Claim Processing Delays

23 Apr 2026: Paige Estritori

Recent data from the Australian Financial Complaints Authority (AFCA) reveals a significant increase in complaints against insurance companies, with an average of 100 complaints per day. This surge is primarily attributed to delays in processing everyday claims, affecting both home-building and motor vehicle insurance sectors. - read more

Climate Change Contributing to Rising Home Insurance Premiums in Australia

23 Apr 2026: Paige Estritori

Insurance Australia Group (IAG) has released a report indicating that climate change is increasingly influencing the rise in home insurance premiums across Australia. The report highlights that the frequency and severity of extreme weather events, such as severe storms and hailstorms, are escalating, particularly in densely populated regions. - read more

WFI Insurance Highlights Significant Drop in Farm Liability Claims

30 Mar 2026: Paige Estritori

WFI Insurance has reported a notable decrease in farm liability claims across most categories, signaling a positive trend in safety practices within the Australian agricultural sector. - read more

Australian Farmers Confront Rising Insurance Premiums Amid Climate Challenges

22 Mar 2026: Paige Estritori

Australian farmers are currently grappling with a significant surge in insurance premiums, with increases ranging from 20% to 40%, depending on the insurer. This escalation is primarily driven by the rising frequency and severity of natural disasters, coupled with a contracting underwriter market and escalating costs of goods and services. - read more

Widespread Rural Crime Exposes NSW Farmers to Repeated Victimisation

22 Mar 2026: Paige Estritori

A recent survey conducted by WFI Insurance in collaboration with the University of New England (UNE) Centre for Rural Criminology has unveiled alarming statistics regarding rural crime in New South Wales. The findings indicate that over 90% of NSW farmers have encountered criminal activities on their properties, with approximately 30% reporting being targeted seven or more times. - read more

Click for more Insurance News