If your car insurance renewal notice shocked you this week, you are not alone. Australian drivers are facing the worst insurance squeeze in a generation as premiums climb faster than petrol prices, leaving families to absorb hundreds of dollars in unexpected costs.
The numbers are stark. Comprehensive car insurance has climbed 42% since 2019, reaching an average of $1,052 per year by 2024, according to the Insurance Council of Australia. But the pain is accelerating. Between 2024 and 2025, premiums jumped another 5.8%, adding an average of $122 to household bills.
The pain is not distributed evenly. Victoria drivers shoulder the heaviest load, paying an average of $2,940 annually, up 8.3% in a single year. Western Australia ($2,032) and Queensland and New South Wales (both around $2,200) follow closely. Tasmania has been hit hardest in percentage terms, with average premiums surging 65% in some cases.
Major insurers have begun aggressively repricing new customers. Bingle increased new car policies by 25%, while Suncorp, RAA, BOQ, CBA, Aldi, and AHM all lifted prices by more than 10%. The only exception has been Kogan, which dropped prices by 31% to capture market share.
The root causes are plain. Vehicle repair costs have jumped 42% since 2019, with the average repair bill climbing from $3,658 to $5,202. Parts and accessories have become 26% more expensive since 2022, partly because modern cars are far more complex than their predecessors. The real killer is repair time. The average car now spends 61 days in the workshop, up from 39 days in 2019. That is a 58% increase. While cars sit idle, insurers must cover rental vehicles for customers, and that cost gets passed straight back to premiums.
The labour shortage is acute. Repair networks cannot find skilled mechanics fast enough, and the shortage is worse for electric vehicles, which require specialist knowledge that most workshops lack. For every collision claim, the delays drive up costs across the board.
The insurance industry points to relief on the horizon, suggesting premiums should stabilise within three to five years as repair networks expand and spare parts become more readily available. But that is cold comfort to drivers renewing next month.
For now, Australian families have few options beyond shopping around, improving driving history, and accepting that motoring costs will keep climbing.