Australia's financial regulator has accused motor insurers of failing to explain why car insurance premiums have jumped 50 per cent in six years, finding that customers often pay a "loyalty tax" without understanding the reasons for increases.

ASIC's survey of 2000 customers found 31 per cent secured lower premiums simply by calling their insurer to push back, yet 67 per cent renewed with the same provider without shopping around. The regulator examined renewal documents from AAMI, Suncorp, Allianz, Territory Insurance, NRMA, RACV, RAC (WA) and Youi — 72 per cent of the market — and found insurers buried generic explanations for price hikes in supplementary documents rather than making them clear upfront.

"There is no upside to loyalty," ASIC commissioner Alan Kirkland said, noting that 54 per cent of customers were unaware insurers could reduce premiums by up to 20 per cent if they paid annually instead of in instalments. ASIC has threatened enforcement action against insurers distributing inaccurate or misleading renewal notices, Elias Visontay reports for SMH business (AU).