Motor vehicle insurance: High losses due to rising repair costs

Motor vehicle insurance: High losses due to rising repair costs

Drivers have to prepare for further increases in vehicle insurance premiums, as providers are expected to lose billions again this year. In the previous year, car insurers were already in the red, which led to a significant increase in the cost of car insurance for many car owners. The prospects of a price reduction are currently not in sight. A current estimate by the General Association of the German Insurance Industry (GDV) suggests that motor vehicle insurers are likely to record a loss of up to two billion euros in 2024.

Insurers are expected to record premium income of around 33.6 billion euros. However, they have to spend between 34.9 and 35.6 billion euros on damages and administration, as GDV managing director Jörg Asmussen explained. The main cause of the high losses is the constantly increasing repair costs for vehicles. Modern vehicles have complex technical systems that make repairs more expensive. In addition to the increased material costs, the repair also requires more working time.

A study shows that hourly rates in vehicle repair shops have also increased significantly. According to forecasts, the average property damage in motor vehicle liability insurance for a car could be around 4,000 euros this year, while in 2014 it was 2,500 euros. Repairs to electric cars in particular are between 30 and 35 percent more expensive than repairs to combustion engines.

How the current situation will affect vehicle insurance premiums is up to the respective insurer to decide. Nevertheless, there is certainly a connection between the development of damage and the amount of premiums for motor vehicle insurance. Given the available figures, it is therefore likely that there will be a further increase in contributions.