The rising prices for car repairs lead to higher car insurance premiums - tips for drivers.

The rising prices for car repairs lead to higher car insurance premiums - tips for drivers.

According to a report by www.t-online.de, the general price increase does not stop at car repairs, which leads to falling margins and expensive spare parts. The president of the German insurer association GDV, Norbert Rollinger, predicts that premiums for motor vehicle insurance will rise by an average of ten percent in 2024. This results from increased prices for repairs and spare parts, which caused insurers to lose billions last year.

According to the association, the costs for spare parts and repairs could continue to rise this year. In 2023, motor vehicle insurers spent 2.9 billion euros more on claims, administration and sales than they received in premiums. This meant that for every euro collected there was an expenditure of 1.10 euros. In addition, the losses in the motor vehicle business led to a drastic decline in the underwriting profit of the entire property and casualty insurance to 1.5 billion euros in 2023.

The report says that building insurance could also become more expensive on average by around ten percent, due to the Christmas flood and the low prevalence of natural hazard insurance. Furthermore, according to the overall association, German insurers only increased their total premium income last year by 0.6 percent to just under 225 billion euros. While revenues in property and casualty business grew, they declined in life insurance.

The increased cost of vehicle insurance can lead to financial burdens for consumers. One possible impact is that people are less likely to have their cars repaired or switch to alternative transportation options to save costs. Industry observers could also see an increase in demand for lower-cost car insurance. This could lead to increased competition among insurance providers to retain or attract customers.

Although the exact impact on the market and consumers will depend on several factors, it is likely that rising insurance costs will cause a change in consumer driving behavior and preferences.