Car Insurance renewal prices explained


If you’ve had a policy for more than a year or two, you may have noticed that your car insurance renewal price can fluctuate from year to year – but you may not have a clear idea of why, or what you can do about it.

Certain factors might be out of your control. But understanding how your renewal premiums are calculated can offer you some control over them.

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Why are Car Insurance prices increasing?

The exact maths that goes into renewal pricing is pretty complex, and pinpointing one reason for a big change can be tough. But there are a couple of big factors.

Wild weather

Weather events, like fires, floods and storms, are getting less predictable and more severe.

Insurance companies are paying more for repairs and recovery following these events, and expect to pay more in years to come. This has a knock-on effect that’s visible in renewal premiums.

Changes to your amount covered

Your car insurance policy may specify an amount covered, which will be listed on your renewal notice. That’s the maximum amount you will be paid for loss or damage to your car following an incident. In the past, most cars have become less valuable as they got older. This meant that – in some cases – policy holders have been able to set a lower amount covered than they might now for the value of their car, though this varies between vehicles.

More recently, though, cars have been getting more valuable rather than less. COVID-impacted supply chain issues mean that cars are more difficult to track down, and so more expensive.

Since the amount covered on a policy affects how the premium is calculated, more expensive cars have meant more expensive renewals for many customers.

How to renew your Car Insurance like a pro

Don’t let your car insurance be a set-and-forget type thing. When renewal time rolls around, log in to My Account and check your details are up to date.

Car finance

Paid off your car in the last year? Awesome! Make sure that’s reflected on your policy, you may save a few bucks.

Listed drivers

The age of your listed drivers can impact your premium. You may wish to check that your listed drivers are up to date, and you may wish to remove anybody who is no longer a listed driver. For example, if your adult child won’t be driving your car anymore as they have since gotten their own, consider whether you want to remove them as a listed driver. Doing so may reduce your premium.

Distance driven

The more you drive, the more you pay. So if your average kilometres driven has dropped, perhaps because you’ve started working from home more, update your policy. You may knock a few bucks off your premium as a result.


Every car insurance policy has a Standard excess that may apply if you make a claim.

If you want to reduce the amount you pay for your Comprehensive Car Insurance policy, you can choose from the AAMI Flexi-Premiums® Excess range, which lets you choose a higher excess and reduces your premium#.

Explore Flexi-Premiums

Amount covered

AAMI lets you adjust the amount covered on your policy, within a set range.

Choosing a lower amount covered can mean that you pay less in premiums. Of course, this becomes your maximum payout in the event of a claim — so a lowered amount covered can put you at risk of being underinsured.

If you make a claim and the cost to replace your car is more than your amount covered, you may have to settle for a less expensive make or model, or make up any shortfall from your own savings. Have a think about whether this is appropriate for you and your budget.

Optional covers

You may have added one or more optional covers to your policy. These contribute to your total premium costs, so take moment to check you have the ones you think you’ll need.

Safe Driver Rewards

If you stick with your AAMI policy, you may qualify for Safe Driver Rewards^! This lets you gain extra rewards and benefits when you continuously insure your car on the same Comprehensive Car Insurance policy, and don’t make a claim that impacts your Safe Driver Rewards status.

If you're interested, you can do a little more reading on how to save on your AAMI policy.

Update and renew your policy

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Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Read the Product Disclosure Statement before buying this insurance. The Target Market Determination is also available.
This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.

#AAMI Flexi-Premiums® is available for Comprehensive Car, Home Building, Home Contents, Landlord, Strata, Comprehensive Motorcycle, Third Party Motorcycle and Caravan Insurance only. 

^Safe Driver Rewards credit/discount is a percentage of the Comprehensive Car Insurance rated premium paid the previous year and is applied as a credit to next year’s rated premium.

The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.