A brand new report from one in every of Australia’s largest automotive insurance coverage suppliers has uncovered a troubling hole between native motorists’ confidence of their automotive insurance coverage information and their precise understanding of what their insurance policies cowl.
Regardless of the overwhelming majority of Australians believing they’re well-informed, insurer Youi’s knowledge has revealed a widespread lack of engagement with key paperwork and processes essential to managing automotive insurance coverage claims.
The 2025 ‘Beneath the Hood Report’, based mostly on a survey of over 2000 Australians, exhibits that 83 per cent of respondents really feel assured of their understanding of their automotive insurance coverage coverage, and 88 per cent consider they’re adequately coated.
But, solely 25 per cent have learn their Product Disclosure Assertion (PDS) in full – the very doc that outlines their rights, obligations, and coverage exclusions.
Tons of of latest automotive offers can be found by means of CarExpert proper now. Get the consultants in your facet and rating an incredible deal. Browse now.
Chris Jarrett, Government Common Supervisor of Claims at Youi, stated the findings reveal a disconnect that would price motorists in the long term.
“It’s clear from the analysis that extra ought to be performed in educating Aussies about insurance coverage and the way to greatest shield ourselves,” Mr Jarrett stated.
“Australians are placing their hard-earned {dollars} in the direction of automotive insurance coverage as a security web. Understanding what your coverage covers you for is vital to feeling assured if you should make a declare.”
The info highlights how this hole in understanding performs out demographically. Males (88 per cent) reported greater confidence ranges in comparison with ladies (78 per cent), whereas Gen Z confirmed the bottom confidence (78 per cent) regardless of being the most definitely to have learn the PDS in full (31 per cent).
In the meantime, Child Boomers and Pre-Boomers emerged as probably the most assured age group, at 85 per cent.
Past the high quality print, the analysis revealed that whereas over 80% of respondents consider they might know what to do instantly following a automotive accident, fewer than half understood the method of creating a declare.
The truth is, almost half (47 per cent) of those that had made a declare up to now relied on exterior assist — from associates, household, on-line sources, or their insurer — to navigate the method.
With greater than 21 million autos on Australian roads and over half of the inhabitants having made a minimum of one insurance coverage declare of their lifetime, Youi is urging drivers to arrange earlier than accidents occur.
“Experiencing a automotive accident is hectic. And the very last thing Aussies want is to have further stress positioned on them from uncertainty of their automotive insurance coverage coverage,” Mr Jarrett stated.
He acknowledged that insurance coverage paperwork are sometimes seen as too advanced and jargon-heavy, which deters individuals from absolutely partaking with them.
The corporate says that as a part of bettering its course of to assist on a regular basis Australians higher perceive what their coverage covers, it has dedicated to simplifying coverage data, incomes a Plain Language Gold Certification (PLGC) for its automotive insurance coverage PDS.
A PLGC is an accreditation awarded to paperwork or organisations that meet excessive requirements of readability and accessibility in written communication.
Whereas enchancment on PDS paperwork will probably be welcomed by most, it comes at a time when automotive insurance coverage premiums in Australia have surged by 42 per cent since 2019, reaching a mean of $1052 in 2024.
This improve is primarily on account of greater automobile restore prices, escalating bills for alternative components and labour, and the rising complexity of auto know-how.
The Insurance coverage Council of Australia (ICA) final month reported the common declare measurement has additionally risen by 42.2 per cent over the identical interval, outpacing the roughly 20 per cent inflation fee.
