The Australian Securities and Investments Commission (ASIC) has taken RACQ Insurance to court, alleging the insurer provided customers with misleading premium comparisons.  

The practice, which spanned more than five years, potentially distorted customers’ perceptions of their policy renewals. 

Between September 2019 and December 2024, more than 570,000 renewal documents from RACQ Insurance, part of Insurance Australia Group, were sent out with what the ASIC claims were inflated “last period premium” figures. 

These figures often did not reflect discounts or policy changes that had reduced customers’ actual premiums, leading to a misrepresentation of premium increases. 

ASIC deputy chair Sarah Court said: “During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents. 

“Not only do we allege RACQ broke the law, but it was also put on notice by its customers, who complained that the ‘last period premium’ amount was misleading, yet RACQ did little about it for more than five years.”  

In one instance, an RACQ customer’s renewal notice indicated a marginal 1.5% premium increase, from $6,930.55 to $7,033.57.  

However, the customer had previously paid $5,024.18, meaning the new premium was actually a 40% hike.  

The ASIC contends that RACQ was aware of the misleading information as customer complaints surfaced just two days after the practice began. 

The alleged conduct spanned various types of insurance including home, car, caravan, boat and pet cover. The ASIC is seeking court declarations, civil penalties and publicity orders. 

Responding to the allegations, RACQ revealed that it had self-reported the issue after a media enquiry in 2024. 

In a statement, the insurer said: “We acknowledge ASIC’s proceedings and will be working through this process to finalise the matter.” 

Earlier this month, Insurance Australia Group concluded its acquisition of RACQ’s insurance underwriting business.