Home and motor insurance prices surged 14% in the year to May after a record 16.5% jump in the year to April, according to the latest consumer price index indicator.

While insurance price rises have eased, the year-to-May increase outpaced 4% annual growth in the overall CPI.

The Australian Bureau of Statistics – which compiles the CPI indicator detailing prices across various household expenditure categories – says higher reinsurance, natural disaster and claim costs continued to drive premiums for motor, home and contents insurance over the past 12 months.

Industry analysts have said premium rises have peaked after the 2022 record floods and subsequent weather disasters forced insurers to raise home and motor prices.

But comparators told insuranceNEWS.com.au it will be a while before households see any relief.

“While there have been no major weather catastrophes in recent times, we know that floods, fires, storms and other natural weather events are just one factor that insurers consider when setting premiums each year,” Compare the Market EGM general insurance Adrian Taylor said.

He says the cost-of-living crisis – while hurting consumers – also means insurers are spending more to offer their services, which could contribute to higher prices.

“Unfortunately, even if you haven’t claimed on your home, contents or car insurance, it’s likely your premiums will increase year-on-year,” Mr Taylor said.

Compare Club head of research Kate Browne says the latest CPI data on insurance is not surprising.

“It’s reflecting what we are seeing in our own research too,” she said. “The sharp rise in insurance premiums has been felt as part of the overall cost-of-living pressures.”

She says the comparator’s bill stress index, published last week, shows that with general insurance in particular, many Australians are suffering anxiety over costs.

“What’s interesting too is that insurance can be viewed as a non-essential cost, but the reality is, without insurance, many Australians are at risk of ending up in deep financial trouble as a result of being underinsured or uninsured,” Ms Browne said.

“We would say there is still a lot of value in staying on the front foot by reviewing and comparing all your insurance policies regularly – there is still an opportunity to shave some of the costs off by doing this.”

Home and motor insurance comparison websites in Australia do not give access to the brands of most major insurers, which have resisted participating.

MCG Quantity Surveyors director Marty Sadlier says the latest CPI data shows “premiums are, quite frankly, out of control. If government is serious about stemming inflation, then it’s time to step in and address the insurance crisis.”

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