Insurance coverage for automobiles is becoming pricier.
Car insurance costs are on the rise. The leading insurance provider in Germany, HUK-Coburg, predicts an increase of around 10% in the coming pricing adjustment, as stated by board member Jörg Rheinländer. HUK is also expected to rise within this range, but Rheinländer hasn't provided specific figures yet.
Rheinländer pointed out three key factors: The cost of replacement parts has skyrocketed recently. From 2013 to 2023, HUK observed an increase of over 70%, which is more than 43 percentage points higher than the inflation rate during that period. At present, prices are climbing at a pace much faster than inflation. Rheinländer attributed this to design protection, which continues to apply to numerous visible components.
Additionally, the hourly rates of auto repair shops have risen significantly above inflation, as per HUK. From 2022 to 2023, this was nearly 10%.
Climate change also plays a significant role, according to Rheinländer. "Climate change is gaining momentum," he said. This is evident in the uptick in damage incidents in the comprehensive insurance sector. For example, average hail damage has surged. While typical hail damage used to be around €3,000, it averaged over €5,000 in incidents like the severe hailstorm in Benediktbeuern on the Bavarian Alps last year.
Rheinländer estimates that approximately 10% of the upcoming price hikes are due to climate change. The remaining percentage is divided roughly equally between more expensive replacement parts and higher workshop costs.
HUK-Coburg, being the leading insurance provider in Germany, not only predicts an increase in car insurance costs but also expects their own rates to rise within the projected 10% increase, as mentioned by board member Jörg Rheinländer.
Furthermore, Rheinländer from HUK-Coburg highlighted that the escalating hourly rates of auto repair shops, which saw a nearly 10% rise from 2022 to 2023, greatly contribute to the increased car insurance costs.
