Consumers must prepare for rising car insurance premiums this year. The next increase is looming in 2025. What customers need to pay attention to now.
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A premium increase of 7.8 percent – that is how much additional costs the German Insurers’ Association (GDV) expects for motor insurance this year. In 2025, premiums in the property and accident sector are expected to rise between 4.9 and 7.2 percent. This is unpleasant news that German insurance companies will probably contact their customers with in the coming weeks and months.
When asked by Capital, HDI from Hanover confirmed the price increase. It applies to some customers. The main reason is “the high level of claims inflation, which has greatly increased the prices for spare parts and repairs for cars in recent years.” According to HDI, risks that are particularly prone to losses, such as mobile homes, are particularly affected. HDI did not want to give detailed figures on how much more customers will have to pay.
Allianz Insurance also confirmed that significantly more must be paid for damages at the moment. A spokeswoman told Capital: “The necessary premium adjustments will therefore tend to be higher than in the past.” She also did not want to disclose exact figures.
So far few increases, in the future probably significantly more
Figures from the GDV show that so far, price increases for motor vehicle insurance have actually been limited. From an average annual premium of 324 euros for fully comprehensive insurance in 2021, the average premium climbed to 333 euros in 2023. It is unlikely that this can be maintained.
Last year, motor insurers suffered losses of over 3 billion euros. “The outlook for this year is not much better,” says GDV Capital. Whether and to what extent this will affect motor insurance premiums is ultimately a company-specific decision.
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Bafin had already reprimanded the insurers
The industry has been struggling with problems for some time. Most recently, the financial regulator Bafin publicly addressed German insurers: “For 2023, the assumptions about claims inflation were in some cases significantly below relevant representative inflation indices,” wrote the Federal Institute. In their view, the companies are being too optimistic. At the end of 2023, the financial regulator demanded: “Many insurers will have to make improvements for the 2023 balance sheet date.” The increased inflation has not yet been included in the premium calculations. Premium increases are necessary to avoid underwriting losses.
A Bafin spokesperson told Capital: “In previous years, it was observed that insurance companies did not sufficiently implement the necessary premium increases, citing the intense competition.” The result: catch-up effects that are now very noticeable for many customers and can make insurance significantly more expensive.
Comparing car insurance early is worthwhile
The consumer advice center advises comparing prices early on. Even if inflation and increased repair costs affect all providers, it is worth taking a look at the offers. Elke Weidenbach from the NRW consumer advice center recommends asking the insurer directly about discount options instead of just relying on comparison portals. Switching from fully comprehensive to partially comprehensive insurance can also be worthwhile. Switching from monthly to annual direct debit can also save costs.
“The worst thing is not to worry at all,” says Elke Weidenbach. Most insurers publish their prices for the coming year in the fall. Until then, it’s worth checking your own tariff.
Source: Stern
