Why your car insurance premium could be on to rise

Tom Watson

Thursday 24 August 2017

The soaring costs of new car repairs are likely to have an impact on car insurance premiums in 2018, with IAG (Insurance Australia Group) announcing that it will increase its premiums next year - following fellow car insurance giant Suncorp’s move earlier this month.

Why your car insurance premium could be on to rise

CEO of IAG Peter Harmer stated that increased premiums would be part of a three-pronged approach to addressing repair costs, which also includes negotiating with car manufacturers over “exorbitant” spare part costs and finding ways to attract customers to use IAG’s in-house network of repairers.

"We have seen a steep change over the last two to three years in terms of average claims sizes and that has accelerated over the last 12 months," he said.

"What we don't want to do is keep putting prices up. There are other things we can do to tamp down the rising inflation. Some of those things include working with manufacturers to establish a more reasonable pricing regime for parts.”

Nick Hawkins, IAG’s Chief Financial Officer, stated that the costs associated with fixing new cars were actually getting higher - a problem that is also being felt outside of Australia. 

"Despite the increased technology in motor vehicles that in theory should be reducing the claims cost coming from car crashes, that isn't happening," he said.

So if your car insurance is about to come up for renewal it come be the perfect time to shop around, especially given a recent Mozo comparison of five different popular car insurers showed just how huge the difference can be in premium costs between insurers - over $1,000 in one case.

So if you’re thinking about making the switch make sure you head over to the Mozo car insurance comparison hub to compare deals of your own.

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