Australians could be paying more for car insurance without fully understanding what is driving the cost, according to a warning from the country’s corporate regulator.

The Australian Securities and Investments Commission (ASIC) has called on insurers to be more transparent about how they calculate premiums, after finding significant gaps in the information provided to customers.

Comprehensive motor vehicle insurance was the most complained-about insurance product in Australia, according to ASIC. Its review of eight insurers found that none clearly explained the key factors used to calculate premiums or why customers’ costs had increased from the previous year.

The warning comes as car insurance costs continue to rise. Premiums increased by 42 per cent between 2019 and 2024, adding further pressure to household budgets.

ASIC Commissioner Alan Kirkland said customers should be given clearer information, particularly when their premiums rise significantly.

The regulator also found that some customers may be missing out on potential savings because they are not told about cheaper payment options. Paying an annual premium rather than monthly could reduce costs by as much as 20 per cent in some cases.

Many customers also did not realise they could potentially secure a lower premium by switching providers.

Mr Kirkland described ASIC’s findings as a clear warning to the insurance industry and said insurers needed to “lift their game”.

ASIC has previously taken legal action against major insurers over issues involving pricing and discounts and said it would continue to act where it finds misleading practices.

The scrutiny comes as major insurers including Suncorp, QBE and Insurance Australia Group prepare to report their financial results.

ASIC said its review did not examine whether insurers were making excessive profits. Its focus was on whether customers were receiving clear and accurate information about the prices they were being charged.

For Australian motorists, the message is simple: if your car insurance bill has risen, you deserve to know exactly why.