A motorist has won $2000 compensation after battling for more than two years to get a proper explanation for soaring premiums.

The man first insured his Hyundai Palisade with RACV Insurance Services in September 2022, at an annual cost of $1027.

The premium increased steadily and by the 2025-26 renewal it had reached $2825. This was despite no claims, the agreed value dropping and the vehicle being used less.

At various times the insured requested explanations, before eventually lodging a dispute with the Australian Financial Complaints Authority.

As AFCA began investigating, the insurer admitted it had made an error in the 2025-26 premium calculation, and it offered to pay the complainant $1649.

“The insurer says the error related to the application of the complainant’s choice of excess and the rating of that choice within the pricing process,” AFCA said.

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However, the ombudsman says the insurer’s response was insufficient, because it did not provide a detailed explanation or say if the error affected premiums in other years.

“It is highly unlikely that an error related to the application of the complainant’s choice of excess and the rating of that choice within the pricing process alone would result in a 60%-70% increase in premium,” AFCA’s adjudicator said.

Call recordings “show the extent of the complainant’s confusion and stress”, as well as repeated requests to be put in contact with someone who could answer his questions.

“I am satisfied it is fair to accept that the responses received … were inadequate. For the most part, a repetitive theme of information about policy premiums in general formed the responses, with no real consideration to his individual policy and associated concerns. This was not reasonable.”

AFCA says the insurer must provide an adequate explanation and investigate other years’ premiums if the complainant wishes, and pay at least the $1649 already offered.

It must also pay $2000 in non-financial loss compensation.

“I am satisfied the insurer has caused the complainant to experience unreasonable levels of stress and delays over an extended period of time,” AFCA said.

“The complainant repeatedly contacted the insurer seeking an explanation/justification regarding his increasing premiums.

“Several different insurer representatives from different areas repeatedly failed to adequately acknowledge his concerns.”

Click here to read the ruling in full.