CAR INSURANCE
Car insurance discounts & deals
By Sean Callery
Car insurance statistics at a glance
- There were 18.13 million car insurance policies issued from September 2023 to September 2024
- Car insurance companies charged $16.8 billion in premiums during the same period
- The average cost of car insurance is $929 per policy
- Insurers paid out a total of $11.565 billion in car insurance claims, or $638 per policy on average
- Northern Territory has the highest percentage of car insurance claims compared to the insurer’s revenue at 92%
- Around one in seven policyholders can be expected to make a claim over 12 months
What’s the average car insurance cost in Australia?
The average cost of car insurance in Australia is $929 per policy, according to the latest data from financial services regulator, APRA. This is based on 18.13 million active risks covered and $16.8 billion in gross written premiums from September 2023 to September 2024.
If this average cost seems low, keep in mind it includes all levels of cover, including comprehensive, third party and compulsory third party (CTP). CTP insurance is typically much cheaper than comprehensive cover, which would lower the overall average cost of all policies.
The actual car insurance premium you’ll pay will depend on a variety of factors, including your level of cover, location, your vehicle make and model, your age, and more.
While the official insurance industry statistics offer a modest average car insurance cost based on a specific dataset, other sources suggest premiums are much higher. According to the Australian Automobile Association, the average yearly cost of car insurance across capital cities is $2,735.85 as of Q2, 2024. The highest premiums are in Sydney ($3,691.48), while the lowest are in Hobart ($2,152.28).
The latest Consumer Price Index (CPI) from the Australian Bureau of Statistics (ABS) shows a significant price increase in insurance as a category, with inflation at +14% in the year to September 2024.
We conducted a survey and found that 15% of Australians consider car insurance premiums their most dreaded bill. It was the third most hated bill, only behind energy bills at 27% and council rates at 18%.
How much do car insurers pay out in claims?
From September 2023 to September 2024, total claims in Australia amounted to $11.565 billion. On average, for every car insurance policy costing $929, about $638 went towards covering these claims. This means that 69% of each policy's premium was used to pay claims.
However, it’s important to note that insurers have additional expenses beyond just claims, which aren't reflected in this figure.
Here’s a state-by-state breakdown of car insurers’ revenue versus claims:
Annual total | New South Wales |
|---|---|
Revenue | $5.279 billion |
Claims | $3.641 billion |
Claims percentage | 69% |
Annual total | Victoria |
Revenue | $4.204 billion |
Claims | $3.362 billion |
Claims percentage | 80% |
Annual total | Queensland |
Revenue | $3.017 billion |
Claims | $2.19 billion |
Claims percentage | 73% |
Annual total | Western Australia |
Revenue | $1.44 billion |
Claims | $1.083 billion |
Claims percentage | 75% |
Annual total | South Australia |
Revenue | $1.168 billion |
Claims | $860 million |
Claims percentage | 74% |
Annual total | Tasmania |
Revenue | $271 million |
Claims | $169 million |
Claims percentage | 62% |
Annual total | Australian Capital Territory |
Revenue | $258 million |
Claims | $184 million |
Claims percentage | 71% |
Annual total | Northern Territory |
Revenue | $83 million |
Claims | $76 million |
Claims percentage | 92% |
| Annual total | Revenue | Claims | Claims percentage |
|---|---|---|---|
New South Wales | $5.279 billion | $3.641 billion | 69% |
Victoria | $4.204 billion | $3.362 billion | 80% |
Queensland | $3.017 billion | $2.19 billion | 73% |
Western Australia | $1.44 billion | $1.083 billion | 75% |
South Australia | $1.168 billion | $860 million | 74% |
Tasmania | $271 million | $169 million | 62% |
Australian Capital Territory | $258 million | $184 million | 71% |
Northern Territory | $83 million | $76 million | 92% |
Based on the figures above, the Northern Territory has the highest percentage of claims to revenue at 92%, followed by Victoria at 80% and Western Australia at 75%. The lowest percentage of claims to revenue is Tasmania at 62% and then New South Wales at 69%. This is followed by South Australia (74%), Queensland (73%) and the ACT (71%).
One area to highlight is the percentage of revenue versus claims by state. The latest APRA data shows that NSW accounts for 34% of total premiums (revenue), but its claims are lower at 31%. In contrast, Victoria has 27% of the insurer revenue, while its claims are higher at 29%.
Share of total | New South Wales |
|---|---|
Revenue | 34% |
Claims | 31% |
Share of total | Victoria |
Revenue | 27% |
Claims | 29% |
Share of total | Queensland |
Revenue | 19% |
Claims | 19% |
Share of total | Western Australia |
Revenue | 9% |
Claims | 9% |
Share of total | South Australia |
Revenue | 7% |
Claims | 7% |
Share of total | Tasmania |
Revenue | 2% |
Claims | 1% |
Share of total | Australian Capital Territory |
Revenue | 2% |
Claims | 2% |
Share of total | Northern Territory |
Revenue | 1% |
Claims | 1% |
| Share of total | Revenue | Claims |
|---|---|---|
New South Wales | 34% | 31% |
Victoria | 27% | 29% |
Queensland | 19% | 19% |
Western Australia | 9% | 9% |
South Australia | 7% | 7% |
Tasmania | 2% | 1% |
Australian Capital Territory | 2% | 2% |
Northern Territory | 1% | 1% |
Most common types of car insurance claims
From August 2023 to August 2024, the Insurance Manufacturers of Australia (IMA) reported the five most common types of car insurance claims, drawn from a dataset of over 150,000 claims. Here’s what IMA found:
1
Collisions (104,857 claims lodged)
The most common collision claims included a third party failing to give way, a third party rear-ending the insured, and the insured rear-ending a third party. Other frequent claims involved collisions while reversing and the insured failing to give way.
2
Glass damage (27,804 claims lodged)
Over 90% of glass damage-related claims were for windscreen damage, with the next most common being damage to windscreens while parked. These claims often involved chips or cracks caused by extreme weather conditions (such as hail) or driving on unsealed roads.
3
Other damage (21,001 claims lodged)
Damage unrelated to collisions or glass accounted for 90% of ‘other’ claims, most of which occurred while the vehicle was parked. Smaller claims in this category included malicious damage, fuel contamination, and third-party property damage.
4
Theft (3,325 claims lodged)
This covered both theft of the vehicle and theft of its parts or belongings, such as electronics, personal property, or other valuables.
5
Wild weather (2,371 claims lodged)
This included storms, floods, and earthquakes, with a significant spike in claims in January and February 2024, accounting for nearly half of the year's total. These claims likely coincided with extreme summer weather, including hail damage.
Car insurance statistics highlight the importance of having cover
While it’s mandatory for all cars in Australia to have a minimum level of cover, known as compulsory third party (CTP) insurance, choosing a higher level of coverage is completely optional. However, a major insurance industry group has stated that comprehensive car insurance can be a lifesaver for many drivers.
“Comprehensive motor insurance provides vital financial protection for motorists in the event of an accident. In any given year, there are approximately 13 million active motor insurance policies and around 1 in 7 policyholders can be expected to make a claim,” a spokesperson for the Insurance Council of Australia (ICA) told money.com.au.
“The ICA’s strong advice for all consumers is to shop around to make sure they are getting an insurance product that suits their needs and budget. They can also look at simplifying their policy and lifting their excess to help reduce the cost.”
Motor vehicle insurance complaints statistics
In its latest annual review, the Australian Financial Complaints Authority (AFCA) reported a total of 29,335 complaints related to general insurance, including car insurance, for the period from 1 July 2023 to 30 June 2024.
According to AFCA, motor vehicle comprehensive insurance topped the list with 10,204 complaints, accounting for 35% of all general insurance complaints. Since 2019-20, complaints related to motor vehicle comprehensive insurance have increased by roughly 148%.
According to AFCA, the top five complaints received across all general insurance products during 2023-24 were:
- 1. Delay in claim handling: 7,470
- 2. Claim amount: 5,563
- 3. Denial of claim: 3,762
- 4. Denial of claim - exclusion/condition: 3,276
- 5. Misleading product/service information: 1,616
What’s driving the increase in car insurance premiums?
The ICA states there isn’t a single factor that’s responsible for the sharp rise in car insurance costs in recent years.
“Across all lines of insurance, upward pressure is being put on premiums. When it comes to motor insurance, there are many factors contributing to this. These include the increasing value of motor vehicles making them more expensive to repair or replace, increasing rental car costs, inflation pushing up repair costs, availability and affordability of labour and the increasing cost of doing business for insurers,” an ICA spokesperson said.
In response to these challenges, the ICA stated the industry is actively working with regulators, advocating for government reforms, addressing workforce shortages, collaborating with manufacturers, and investing in improved fraud detection and prevention. While progress is being made, the ICA noted that more needs to be done to tackle the root causes of rising motor insurance costs.
