Australian motorists are experiencing continued pressure from rising comprehensive car insurance premiums, with average annual costs increasing by 5.8% between 2024 and 2025, according to Canstar’s latest Car Insurance Star Ratings and Awards.
The findings are based on an analysis of over 67,000 quotes across a broad range of vehicle and driver profiles.
This translates to an average increase of $122, bringing the typical comprehensive policy to $2,226, up from $2,104 a year earlier.
While the pace of growth has slowed compared to last year’s 30.5% rise, the current upward trend still reflects persistent cost pressures in the market.
State-level analysis revealed significant variation in premiums.
Victoria reported the highest average annual cost at $2,940, marking an 8.3% year-on-year increase.
Western Australia followed with a 7.8% jump to $2,032, while New South Wales and Queensland also posted increases of around 5.8% and 5.7%, respectively.
Tasmanian motorists faced the lowest average premiums at $1,785, despite a modest 4.4% increase.
Driver age and gender continued to influence premium pricing. Those over 50 saw the largest proportional increase at 6.5%, although their average premium remains the lowest at $1,260.
Young male drivers under 25 remain the highest-cost demographic, with premiums averaging $3,020.
In comparison, drivers aged 30 to 49 paid $1,607 on average, while those aged 25 to 29 faced premiums of $2,176.
The younger age groups, particularly males, reflect elevated risk profiles based on claims data.
Canstar’s analysis also highlighted the potential for savings through switching providers.
On average, motorists could save approximately $692 annually by moving from a typical policy to one of Canstar’s top-rated offerings, which average $1,534.
The potential savings are greater for certain groups.
Victorian drivers could reduce their premiums by up to $967, while young male drivers under 25 might save as much as $1,000. Drivers with family vehicles also stood to save over $1,000 by switching.
Seven insurers were recognised for outstanding value and service.
ROLLiN’ Insurance was acknowledged for strong performance across multiple states, while Bingle and Australia Post were highlighted for Western Australia and the Northern Territory, respectively.
RAA received the Most Satisfied Customers award for claims experience.
Sally Tindall, Canstar’s director of data insights, said many drivers are still paying more than necessary due to automatic renewals.
“One of the biggest mistakes drivers can make is viewing their annual renewal notice as a tick and flick exercise. Instead, your notice should be seen as a reminder to do a quick comparison,” she said.
She noted that selecting a policy should involve evaluating both cost and included benefits. Features like usage-based discounts, optional higher excess, and safe driver rewards may contribute to lower long-term costs.
Separate data from comparison site iSelect and the Insurance Council of Australia (ICA) indicated that consumer misrepresentation during the application process is a growing concern.
Approximately 6.8% of surveyed drivers admitted to providing false information to reduce their premiums.
The most frequently misrepresented details included parking locations, annual kilometres travelled, and vehicle usage.
Younger drivers were the most likely to admit to inaccurate disclosures, with 15.4% of respondents aged 18–24 acknowledging the practice.
Adrian Bennett, general insurance lead at iSelect, said inaccurate disclosures could lead to claim rejections or policy cancellations.
“While it may be tempting to misrepresent details such as your car’s parking location or annual mileage to lower insurance premiums, doing so can have serious consequences that may end up costing you more in the future. If an insurer discovers false information, they may cancel your policy or deny a claim – leaving you financially responsible,” he said.
He added that industry efforts to promote greater transparency and driver education could help mitigate underwriting risks and reduce long-term premium growth.
