fbpx
Savvy logo
1300 974 066
Savvy logo

Why Has My Car Insurance Gone Up?

Find out what might be causing your car insurance rates to rise and how you could save with Savvy's informative guide.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 16th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner - Couple looking at car insurance after their premiums have gone up

Car insurance provides peace of mind, protecting you financially in the event of accidents, theft or damage to your vehicle. However, you might be wondering why your premiums always seem to be on the rise, even if your driving habits haven’t changed. In this handy guide, we explore the factors influencing car insurance premium increases in Australia and offer tips on getting a better deal on your policy.

What is a car insurance premium?

A premium is the amount you pay an insurance provider to cover your vehicle against a variety of risks. The premium is calculated based on the perceived likelihood of you making a claim and is tailored to your unique risk profile. This means that the amount you pay for coverage is determined based on various factors related to you and your vehicle.

What factors influence car insurance premiums?

The cost of insuring your vehicle can vary significantly from person to person, with insurers taking a range of factors into account. This includes:

  • Details about your vehicle: this includes your car’s make, model, age, whether there is any outstanding finance and any modifications you’ve made.
  • Level of coverage: car insurance cover in Australia ranges from basic third party property damage to comprehensive insurance. The more comprehensive the coverage, the higher the premium is likely to be.
  • Location: where you live and where your car is parked overnight can impact your premium. Insurers consider crime rates in your area, so parking in a locked garage may lead to lower premiums compared to parking on the street.
  • Personal information: your age, gender, driving history and claims history all play a role. Younger or less experienced drivers and those with past accidents or claims may face higher premiums due to increased risk perception.

Why has my car insurance premium increased?

Even if you’ve maintained a good driving record, you may find your insurer has increased your premium when your car insurance policy comes up for renewal. Here are some common reasons why this may be the case:

  • Changes in personal circumstances: factors such as changing your driving habits or moving to an area with a higher crime can influence your premiums.
  • Inflation: as with most goods and services, inflation can affect the cost of cars, car parts and repairs, prompting insurers to adjust premiums to reflect these rising expenses.
  • Costs to the insurer: Just like individuals facing an increased cost of living, insurance companies may raise premiums to cope with the rising costs of running their business.
  • Increase in natural disasters: periods with higher occurrences of floods, fires, storms (including hailstorms) and other natural weather events lead to a surge in insurance claims, which can contribute to premium increases in subsequent years.
  • More risk to insurers: if there is an increase in car-related crimes, road fatalities or other risk factors, insurers may adjust insurance prices to protect themselves.
  • Government taxes and levies: changes in government taxes, state or territory duties or levies can also impact the overall premium cost.

How can I reduce my car insurance premium?

While some factors are beyond your control, there are steps you can take to reduce your car insurance premium. This could include:

  • Increasing your excess: you may be able to opt for a higher excess amount to reduce your premium – though keep in mind this means higher costs in case of a claim.
  • Limiting drivers: limiting the number of drivers using your car, particularly young or inexperienced drivers, may lower your premium.
  • Parking securely: storing your car in a secured parking area, such as a locked garage, can reduce the risk of theft and vandalism, leading to lower premiums.
  • Maintaining a safe driving record: maintain a good driving record to be eligible for a no-claim discount, which can lower your premium.
  • Evaluating optional extras: consider whether you need all optional extras included in your policy, as they can increase your premium.
  • Shopping around: review your policy annually, comparing quotes from different providers to ensure you get the best coverage at a competitive rate.

Helpful guides on car insurance

Car Insurance Banner - Couple driving in an open-top car, happy about receiving a no-claim bonus on their car insurance.

No-Claim Bonus in Car Insurance

Find out more about no-claim bonuses and how they can benefit your car insurance policy right here with Savvy. Looking...

Car Insurance Banner - Cars parked in a flooded basement

Car Insurance Flood Damage

Understand the type of car insurance you need to protect against flood damage and what to do if your car...

Car Insurance Banner - Young woman smiling while driving a car.

What Does Car Insurance Cover?

Read about what your car insurance does and doesn’t cover right here with Savvy. What your car insurance policy covers...

Car Insurance Banner - Happy couple driving an open-top red car.

Stamp Duty on Car Insurance

Find out what stamp duty on car insurance is and how it works through Savvy’s helpful guide. When it comes...

Car Insurance Banner - Couple signing their car purchase and cover note contract at a dealership.

Cover Note Car Insurance

Find out how cover note car insurance worked and what your alternatives are to this type of cover today with...

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.
Start comparing now

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.

Disclaimer:

Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.

1300 974 066

Sign up to our newsletter

Disclaimer and important things you should know

Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.

We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.

For more information about us and how we conduct our business, you can read our privacy policy and terms of use.

Savvy logo

© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.

© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.

Savvy logo

1300 974 066

Sign up to our newsletter

Disclaimer and important things you should know

Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.

We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.

For more information about us and how we conduct our business, you can read our privacy policy and terms of use.

Car Insurance Banner - Couple looking at car insurance after their premiums have gone up

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.