Australian car insurance costs are on the rise! According to the latest inflation figures from GlobalData, insurance prices rose 12.2 per cent in the year of 2024. This increase is driven by several factors, including the rising cost of car repairs, an increase in accidents, and ongoing shortages in the automotive industry. Let’s take a closer look at why your insurance premiums might be going up.

Expensive Repairs:
Modern cars are loaded with sophisticated technology (sensors, cameras, driver-assist systems). Even a minor fender bender can damage delicate electronics. For example, when Toyota Motor Corp. upgraded its Camry sedan in 2018, its front bumper went from having 18 parts to 43, including sensors for the advanced driver-assistance system that can control speed and lane position automatically as well as provide blind-spot warnings. As a result, it now costs 43% more to repair a Camry after a front-end collision.

Electric Vehicles (EVs):
EVs are even more expensive to repair than traditional vehicles. Battery replacement, specialized handling, and longer repair times all drive up costs. For example, a seemingly minor collision in your Tesla could require the entire battery pack to be removed and checked for damage, adding significantly to your repair bill and insurance claim.

Increased Accidents:
Despite safety technology, Australian roads are seeing more frequent and severe crashes. Distracted driving is a major contributor. From November 2022 to November 2023, the number of car accident fatalities increased by 6.3 percent.

Shortage of Mechanics and Parts:
Supply chain issues and a shortage of mechanics (especially those trained for EVs) have inflated repair costs, resulting in higher insurance premiums.