Car insurance will be significantly more expensive for car owners in the future. After buying a car, consumers have to expect a surcharge of around 20 percent. The reason is higher repair costs.
Car owners in Germany now have to dig significantly deeper into their pockets for their vehicle insurance than they did a year ago. According to Verivox’s vehicle insurance index, car insurance has become on average 20 percent more expensive over the past twelve months. This is well above the general inflation rate. It fell to 2.2 percent in March, the lowest value in almost three years.
According to Verivox data, when consumers take out new insurance after buying a car, they pay an average of 18 percent more for a liability policy in the medium price segment than in April 2023. Partial insurance is then 19 percent more expensive, and fully comprehensive insurance is 21 percent more expensive than before a year. If you simply change your insurance without buying a car, the partial and fully comprehensive tariffs will then become even more expensive.
According to the consumer advice center, insurance prices sometimes vary considerably. Consumer advocates say that those who compare can often save significantly.
Car repairs are becoming more and more expensive
“As early as the switching season in October and November, motor vehicle insurers increased their prices significantly in order to cover their costs,” said Wolfgang Schütz, managing director of Verivox Versicherungsvergleich. “But because claims costs continue to rise, motor vehicle insurers are still making losses.” Several insurers brought new tariff generations onto the market in April and made their premiums even more expensive.
However, insurers are suffering from sharp increases in the cost of car repairs, which, according to the German Insurance Association (GDV), have driven this area of property and casualty insurance into the red. In 2023, German motor vehicle insurers made a deficit of over three billion euros, and for this year GDV predicted a further loss of up to two billion euros at the beginning of the month.
According to GDV, car property damage cost motor vehicle liability insurers an average of around 3,700 euros in 2022. In 2017, this value was around 2,700 euros.
Trend is likely to continue
Stanislas Sturmer, car expert in Aschaffenburg, says opposite tagesschau.dethat insurance fees may have even doubled in the last ten to 15 years. This trend will continue, says Sturmer. According to Verivox’s assessment, this will not remain an isolated case. “Insurers will have to continue to increase their premiums in the medium term in order to slip back into the profit zone,” said Schütz.
Why are car repair prices rising so dramatically? HUK-Coburg CEO Klaus-Jürgen Heitmann has been accusing car manufacturers for years of increasing prices for spare parts far above average. But workshop and other costs have also increased. The HUK had therefore also announced tariff increases.
Hourly rates in vehicle repair shops have recently risen, also significantly more than general inflation. In addition to the increased prices for spare parts, the more complex technology and electronics that are installed in the car models also play a role. In particular, assistance systems and sensors, which have to be replaced and readjusted after an impact, drive up prices. The repair time also increases in proportion to the effort involved.