Car insurance pricing

How your premium is calculated when buying or renewing your policy

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Why car insurance costs have risen

The insurance industry is experiencing challenging market conditions, which has had a knock-on effect for reinsurance costs for new and renewed policies alike. Let’s look at some of the major reasons for the increase:

Repair and replace costs
Higher than average inflation, combined with worldwide shipping delays and material shortages have increased the costs of car repairs and replacements. New and second-hand vehicles, as well as spare parts, are difficult to get a hold of and more expensive for everyone.

Skilled repairer shortage
Following on from COVID-19, Australia continues to face a shortage of skilled repairers. This means that car repairers are harder to find and book, making repair and labour costs more expensive.

Extreme weather events
Weather events like bushfires, floods and storms are happening more frequently and severely. This increases the level of insurance risk alongside rising costs associated with managing claims.

Manage your policy

Are your policy or payment details out of date? You can check what you’re covered for or update your policy details by logging in to your online account or calling us.

Take control of your policy 

Whether you're buying a new policy or renewing your existing one, here's how to help make sure your cover suits your lifestyle and budget.

Flexible basic excess^

A higher excess may reduce the premium you pay upfront – but remember, this is the amount you’ll contribute towards a claim if the time comes. Adjust your excess online

Market and agreed value

If you have Comprehensive Car Insurance, you can be insured for the market or agreed value. Agreed value can be different to what your car’s worth now, so it’s worth reviewing your total sum insured.

Optional covers

If you have Comprehensive Car Insurance, make sure any optional covers you have are still relevant to your circumstances, like hire car after an accident or windscreen replacement. Review your optional covers

Car finance

If you’ve paid off finance owing on your vehicle in the past year, updating your policy could help lower your premium.

Listed drivers

Check the drivers listed on your policy are up to date and consider removing any additional drivers who don’t drive your car anymore.

^ Only applies to Complete Care® or Comprehensive policies.

Exclusive benefits and discounts for RACV Members 

Everyday savings

RACV Members save on exclusive offers and discounts, including everyday items like groceries, fuel and e-gift cards from a range of popular retailers.

Loyalty discount

The longer you're a member, the greater your discount on selected products with our Years of Membership benefit#.

Flexible payments

Pay the way that suits you – annually or monthly – and manage your premium. You can help reduce your premium upfront by selecting a higher basic excess.

Frequently asked questions 

Your premium is based on the likelihood of a claim being made on your insurance policy in the future and the anticipated cost of a claim if this happens.

A combination of factors are considered when working out your premium, including:

  • pricing factors, like your vehicle and where it’s kept
  • choice of excess
  • policy options, like choosing any repairer
  • age of the vehicle owners and drivers
  • the number of previous claims and incidents
  • discounts you’re eligible for
  • government changes.

To understand how these things may affect your premium, check out our Premium, Excesses and Discounts Guides.

You may have seen an increase to your premium when you received your renewal notice. There are many things that may impact the cost of your insurance year-on-year, like:

  • inflation
  • increased wild weather
  • being involved in a recent incident
  • parts and labour shortages
  • changes to your circumstance like changing your address
  • adding optional covers.

These can affect your premium even if you’ve never made a claim and your personal circumstances haven’t changed.

RACV Insurance can help protect what matters to you the most, should you ever need to make a claim. As an RACV Member, you can manage your premium with flexible basic excess options (for Complete Care® and Comprehensive), monthly and annual payment options.

To understand how we work out your premium, check out our Premium, Excess and Discounts Guide.

When your insurance is due for renewal, you'll find the details on your renewal notice.

You will receive this via mail or email, depending on your communication preferences. You can also find a copy in your online account.

To renew your policy:

  • Go to your online account
  • From your dashboard, review your policy details
  • Click ‘Make payment’ when you’re ready to renew.

When to pay 

If you have monthly direct debit payments set up, you don’t need to do anything – we’ll take payment on your regular date. 

If you pay your policy annually, you'll need to make a payment before the due date. 

You can pay online, over the phone, in one of our retail or agency stores, or at your local post office. Payment methods include Visa or Mastercard, PayPal or BPAY.

Learn more about billing and payments.

There are a few things you can do to help reduce your premium.

Increase your excess
Choosing a higher basic excess can reduce your premium. But remember, if you make a claim, you’ll pay more out of pocket.

Pay annually
When you pay your insurance upfront, instead of in monthly instalments, you may pay less.

Multi-Policy discount
Save up to 10% on each policy when you take out more than one eligible RACV insurance policy.* Find out which policies are eligible

Loyalty discount
The longer you’re a Member, the greater your discount on selected products# with our Years of Membership Benefits loyalty discounts program.*

If you have Complete Care® or Comprehensive policies, you can choose your basic excess amount when you join or renew your policy.

If you want to increase your basic excess, you can do this at any time.

Keep in mind

  • If you choose a higher basic excess, your premium may decrease.
  • Changing your excess may also affect the types of incidents for which you can make a claim. For example, if the damage is not above the basic excess, you’ll be unable to claim.

Your basic excess amount will be shown on your Certificate of Insurance.

To update your car insurance policy:

  1. Go to your online account
  2. Click on your product
  3. Click ‘view details’
  4. Under ‘Options and excesses’ click ‘edit’.

You can also call us on 13 72 28 or visit a retail store. For more detailed information, read the Premium, Excesses and Discounts Guide.

Agreed value
This is how much we agree to insure your vehicle for. You can choose from within a value range, and it remains fixed for the term of the policy.

At renewal we consider the changes in your vehicles agreed value using local market values. Check your renewal notice for any changes. 

Market value 
This is our assessment of your vehicle’s value at the time of an incident you’re making a claim for. We use local market prices and consider the age and condition of your vehicle.

For more information on what’s included in your agreed or market value, check the Product Disclosure Statement.

You can only choose between agreed and market value if you purchase a Comprehensive Car Insurance policy.

Sometimes things happen that are beyond our control which can make it difficult for us to keep up to date with paying bills. If you need financial hardship support with any of your RACV products or services, we're here to help in any way we can.

We're happy to talk about your options if you call us on 13 15 60, or you can find out more about the financial hardship support we offer.

# RACV Years of Membership: at 5 years Bronze cardholders receive a 5% discount, at 10 years Silver cardholders receive a 10% discount, at 25 years Gold cardholders receive a 15% discount and at 51 years Gold 50 cardholders receive a 20% discount.

* The Multi-Policy Discount and Years of Membership Benefits exclude Travel, Business and Farm Insurance products. To qualify for the Multi-Policy Discount, you must hold two eligible RACV Insurance policies. For further details, see the Premium, Excess and Discounts guide at Discounts will only be applied until any applicable minimum premium is reached. On renewal, any increases or decreases in your premium may be limited by factors such as your previous year’s premium. You may not save more with more eligible policies and by staying with RACV Insurance longer if a minimum premium is reached, or limits have been applied to increases or decreases in your premium.

The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.