Insurer - Car insurance will considerably increase for drivers
A Contribution Increase of 7.8 Percent – the Total Association of Insurers (GDV) expects this much more costs for Car-Insurance this year. Premiums in the Damage and Accident sector are expected to therefore increase between 4.9 and 7.2 Percent by 2025. Unpleasant news that German insurers will likely share with their customers in the coming weeks and months.
HDI from Hannover confirmed to Capital that there will be a price increase. This affects some customers. The main reason being "the high damage inflation, which has significantly increased the prices for replacement parts and repairs for cars in the past few years". Particularly affected are high-risk damages such as for example caravans. Detailed numbers on how many customers will have to pay more, HDI did not want to disclose.
Allianz Insurance also confirmed that damages currently cost significantly more. A spokesperson told Capital: "The necessary premium adjustments will therefore tend to be higher than in the past." Exact numbers she did not want to reveal.
Prices have hardly risen, but they will likely increase significantly
GDV numbers show: Car-Insurance price increases have actually remained within limits. From an average annual premium of 324 Euro for a Full-Coverage Car-Insurance in 2021, the average contribution rose to 333 Euro in 2023. Whether this will continue to hold is unlikely.
The Car-Insurance industry suffered a loss of over 3 Billion Euros last year. "The prospects for this year are not much better," the GDV told Capital. Whether and to what extent this will affect Car-Insurance premiums is ultimately a business decision.
Bafin had already criticized the insurers
The industry has been struggling with problems for some time. Most recently, the Financial Supervisory Authority (Bafin) publicly addressed the German insurers: "For the year 2023, the assumptions regarding damage inflation were in some cases significantly below representative inflation indices," wrote the Federal Agency. The companies are giving themselves too optimistic a view. Bafin demanded at the end of 2023: "For the balance sheet date 2023, many insurers must revise downwards." The increased inflation has not yet been incorporated into the premium calculations. Premium increases are necessary to avoid underwriting losses.
A spokesperson for Bafin told Capital: "In the past years, it could be observed that the insurance companies have not sufficiently implemented the necessary premium increases with reference to the intense competition." The consequence: catch-up effects, which can significantly increase premiums for many customers.
Comparing Car-Insurance early pays off
The Consumer Center advises comparing prices early. Even if inflation and increased repair costs affect all providers, it pays to take a look at the offers. Elke Weidenbach from the Consumer Center NRW recommends directly asking the insurer about discount possibilities instead of just using comparison portals. Switching from Full-Coverage to Partial-Coverage Insurance can also save costs. Switching from monthly to annual billing can also save costs.
"The worst thing is to not pay attention," so Elke Weidenbach. Most insurers publish their prices for the coming year in the fall. Until then, it pays to check your own tariff.
The automatic increase in car insurance premiums is a consequence of the high damage inflation, leading to increased costs for replacement parts and repairs. To cover these expenses, some insurance companies, such as HDI, may implement automatic price adjustments.
In an effort to maintain financial stability, the insurance industry is considering implementing automatic increases in car insurance finances to avoid underwriting losses, as suggested by Bafin.
