Downgrading to an unfavorable no-claims class – tips from experts

Downgrading to an unfavorable no-claims class – tips from experts

According to a report by www.weser-kurier.de,
Winter road conditions can lead to fender damage, which is covered by vehicle liability insurance. However, if you have fully comprehensive insurance, it is likely that you will be downgraded to a less favorable no-claims class (SF class), which may result in an increase in the insurance premium. This happens regardless of the amount of damage and regardless of whether a deductible was agreed. To counteract this scenario, the NRW consumer advice center recommends various measures. This includes the option to pay the damage out of your own pocket, buy the damage back or take out discount protection.

These developments in the automobile insurance industry can have various effects. Downgrading to a less favorable SF class can result in insurance premiums being significantly increased in the following year, increasing the financial burden on consumers. In addition, uncertainty about the costs of downgrading liability and comprehensive insurance may lead consumers to choose the option of paying the damage out of their own pocket rather than letting the insurance company settle it. This can lead to a lower loss ratio for insurance companies. The ability to buy back the loss can also lead to a reduction in the loss ratio if insured parties choose to pay the loss themselves even though it was initially covered by the insurance company.

Overall, increasing uncertainty about the impact of damage on vehicle insurance premiums may lead to consumers increasingly considering whether it makes more economic sense to pay for damage themselves or to let the insurance company settle it. This could have a long-term impact on insurance companies' loss ratios and possibly lead to adjustments to rates and conditions.