Understanding rising car insurance premiums
Car insurance premiums are increasing across the industry, and we’ll outline what may be causing these increases.
Some of the factors that may be impacting your premium include:
We’ll also look at what RACQ is doing to help members with rising car insurance costs.
Inflation
Australia’s inflation rate has been slowly rising, with the latest increases having a large impact on our finances.
Consumers have experienced higher inflation rates, flowing onto soaring costs of food, utility bills, services and even car insurance premiums.
Meanwhile, insurers have incurred increasing costs of repairs due to low availability and delayed deliveries of auto parts, and higher labour costs because of worker shortages.
To continue operating and offering benefits to customers, insurers must consider inflation costs among other factors when calculating car insurance prices.
Busier roads
If you’ve been out on Queensland roads recently, you may have noticed slightly more traffic and an influx of cars.
Recent figures by the Queensland Government Statistician’s Officer (Queensland Treasury) show that in the 12 months to 31 December 2022, Queensland’s population grew by 2.2%.^
This seemingly small percentage equates to a substantial increase of 116,562 new Queenslanders over the 12 months.
Plus, Queenslanders love their cars because according to the Department of Transport and Main Roads (TMR), there were over 149,000 more vehicles on the Queensland register between 30 June 2021-22.~
With more and more motorists on our road, it means the likelihood of having a car accident may increase. Because of this, car insurance premiums must also increase to cover the added risk.
Severe weather events
If you’re a Queensland local, you may occasionally experience severe weather events, like floods or hailstorms.
Unfortunately, living in an area that’s prone to unpredictable and damaging weather could impact your car insurance costs.
These weather events aren’t easy for insurers to manage, as they result in more car insurance claims than usual. This means more money will be spent on staffing costs, as well as car repairs and replacements.
With potentially more events on the horizon, insurers in Queensland must factor the risks of severe weather into car insurance premiums.
Being covered for weather events is something to consider when you compare car insurance cover.
Supply chain issues
If you’re in the market to buy a new car, or you’re just trying to get your vehicle fixed at your local auto shop, you may have to wait longer than usual.
Vehicles and auto parts are in high demand and low supply, which has put pressure on the supply chain.
Australia’s auto supply chain issues have resulted in:
- Longer waiting and repair times
- Higher repair costs for cars with new technology
- Increased importing expenses
- Skilled labour shortages
When calculating your car insurance price, insurers consider the extra time it will take to repair and replace vehicles and how much more it will cost them for longer turnarounds.
What is RACQ doing
As RACQ is owned by our members, we try and keep car insurance premiums as low as we can. However, we still want to be able to continue providing quality car insurance products and great customer service to Queenslanders.
To help our members, RACQ provides savings on fuel and car retailers, as well as discounts on windscreen repairs and replacement, vehicle inspections, batteries and more.
Know that you have choices when it comes to your RACQ car insurance policy. You decide the optional extras you would like to take on. You can choose your payment frequency as well as your excess amount. This can help make your car insurance cost more manageable and suitable to your needs.
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The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.
Insurance products (excluding Travel Insurance) are issued by RACQ Insurance Limited ABN 50 009 704 152 (RACQ). Conditions, limits and exclusions apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the Product Disclosure Statement (PDS) and any applicable Supplementary PDS before making a purchase decision on this product. You can also access our Target Market Determinations on this website.
Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, and consider if appropriate for you before deciding.
Except for RACQ Bank, any RACQ entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of RACQ Bank. RACQ Bank does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.
RACQ Operations Pty Ltd (ABN 80 009 663 414 AR 000234978) and Members Travel Group Pty Ltd (ABN 45 144 538 803 AR 000432492) are acting as an Authorised Representative of the issuer of the insurance, Tokio Marine & Nichido Fire Insurance Co., Ltd. (ABN 80 000 438 291 AFSL 246 548). Any advice set out above is general in nature only, and does not take into account your objectives, financial situation or needs. Before purchasing any travel products, please consider the RACQ Travel Insurance Product Disclosure Statement (PDS) and the Target Market Determinations (TMDs) that apply to these products. Whilst the PDS outlines the Terms and Conditions of these products, the TMDs outline the intended class of customers that comprise the target market for these travel products. This will allow you to consider which products best suit your objectives, financial situation and needs and consider the products appropriateness to your personal circumstances. TMDs also outline matters involving the distribution and the review of these products. The PDS, Supplementary PDS and TMDs for each travel product can be found here.
Insurance products (excluding Travel Insurance) are issued by RACQ Insurance Limited ABN 50 009 704 152 (RACQ). Conditions, limits and exclusions apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the Product Disclosure Statement (PDS) and any applicable Supplementary PDS before making a purchase decision on this product. You can also access our Target Market Determinations on this website.
^Data sourced from Queensland Government Statistician's Office – December 2022 quarter.
~Data sourced from Department of Transport and Main Roads.