Auto insurance reform: Propositions and implications of new classifications

The new type and regional classes of motor vehicle insurers have just come out. With higher rates, the policies become more expensive. Change can protect against this.

First the good news: Motor vehicle insurance will be cheaper for more than four million people in the coming year, at least when it comes to the regional class – but at the same time it will be more expensive for so many people . The reason for this is the annual recalculation of loss balances by the General Association of the Insurance Industry (GDV). We explain how the prices are made up, when it is worth canceling and what your rights are if the prices are increased.

Why do grant rates change each year?

The amount of car insurance premiums depends on several factors. An important factor is the region in which a car is registered, the so-called regional class. These are available for motor vehicle liability insurance as well as comprehensive and partial comprehensive insurance. These regional classes are adjusted according to the frequency and level of damage: If there are more accidents in a certain area, insurance in this regional class becomes more expensive.

The same thing applies to the classes called type. Every year, an independent trustee examines the damage history of around 33,000 vehicle models on the German market. Based on this data, new classifications are made for those car types where less damage has been reported and compensated compared to previous years – or vice versa. After publication, the new classification is now valid for new contracts and for existing contracts on the specified key date. As a rule, this is January 1 of the following year. Comprehensive insurance also takes into account local factors such as the incidence of theft, smoke and glass damage, vehicle fires and the number of wildlife accidents.

In addition, your personal non-claims class, for example, affects the amount of the premium. For some time now, insurance companies have also been pointing to increased repair costs: materials, spare parts and working hours in workshops are significantly more expensive than they were a few years ago.

When is it worth changing car insurance?

Competition is fierce in the insurance industry, also due to the aforementioned higher costs. So new customers are often attracted by cheap tariffs. For this reason, it can be financially worthwhile to change your car insurance regularly, maybe even every year. If you want to end a contract, you must usually do so in writing or by email and adhere to the notice period. Most contracts can be terminated on 31st December. To use this, the insurance company must receive the cancellation by November 30th. In order for you to have confirmation of cancellation, you should be asked to receive confirmation. When it comes to emails, it’s worth keeping the sent email in your outbox and asking for a read receipt.

However, some providers also have different deadlines, so it’s best to check your own contract. Many contracts run for a year. If they are completed during the year, ie on 30 April, they can be completed on 1 May of the following year. If you want to stay with your insurer, you may be able to get a discount if requested.
Special cases In addition to a “normal termination,” drivers can terminate their contract abnormally after a high increase or damage event. Even if the car is stopped, the insurance coverage can actually be cancelled. However, proof of closure must be provided to the insurance company.

Can you influence the level of insurance premiums?

In addition to changing providers, individual insurance elements can be changed and thus save money. First and foremost, this includes checking the actual kilometers driven. If 10,000 kilometers is specified in the contract, it costs 16 percent more than if 5,000 kilometers are driven. Tip: Many insurance companies also accept a change in the current year’s mileage and then reduce the insurance amount.

Whether you pay annually or, for example, monthly also makes a big difference. If policyholders pay monthly, it costs them about eight percent more each year than they would pay annually. Studies have shown that those whose sums are collected every six months still pay an average of four percent more. Tip: If you save the money in a current account, for example, you will even get interest.

The smaller the group of travelers, the cheaper it will be. In theory, a solo driver will save the most. However, some insurance companies with partners have exceptions: some offer small discounts for couples. However, this varies from supplier to supplier and should be specifically enquired.

How to save your contract with a new driver?

In general, studies have shown that if new drivers are allowed to get behind the wheel, their contribution almost doubles on average. Providers define differently how long a driver is considered “young”. For some, the 25th birthday is crucial, for others several years of driving experience. So savings hunters should keep an eye on how long their children travel in the family car: If they leave the nest for study, their own apartment or a semester abroad, the remove children from the contract as well. Tip: If Junior comes home for the holidays, he can be included in the deal again for a limited time. A phone call or email will usually suffice. Make sure your insurance coverage is verified. This is also important for children or grandchildren. If you can demonstrate regular driving experience when you buy your first car, your first insurance will also be cheaper.

New drivers can also transfer unclaimed classes (SF classes) to them, for example from relatives. Important: The SF classes will be lost eventually, there is no turning back from the decision. To avoid disputes, this option should only be used if it is clear that the discount itself is no longer needed. This can be the case if grandma and grandpa no longer want to drive for reasons of age or if the parents give up their second car when they retire. By the way, this also works if the owner of the SF class has died and the children have inherited the car. The discount can be applied with a death certificate.

Several insurance companies also offer discounts if you can prove driving with them from the age of 17 or if your parents’ car is already insured by the same provider. Even the contract of use with a car sharing provider provides evidence of driving experience. If the provider confirms this in writing, the insurance company can assign it to a better SF class. Be careful when comparing prices online, as such conditions are often not available there. It is best to ask the supplier.

Can I affect a regional class or type?

The regional class cannot be changed: it is not allowed to register a car somewhere else, for example on a weekend property. However, the class type can certainly be tweaked. In the end, insurers take a close look at which models crash particularly often or which types are stolen more often. Models with more powerful engines such as the Audi A83.0 TDI or Jeep Grand Cherokee 3.6 V6 are classified in higher type classes than models with a lower or older engine such as the Ford Ka 1.2. Here you can only compare and save before you buy. If you plan to buy a car anyway, you can diversicherer.de/versicherer/auto/typklassenabfrage information about the current type classes.

If you now have a price increase notice from your car insurance company in your mailbox and you want to switch, you should take a close look at the prices and conditions on at least two comparison portals, check the individual parameters in detail and ask the previous supplier for better conditions. Price increases may be avoided this way.

When dealing with insurance companies, you should always confirm commitments in writing. This way you have evidence if there is a dispute.

Elke Weidenbach, insurance expert at the NRW Consumer Center

Attentive communication

It is best not to rely on phone promises from the opposing insurance company

The case

At first everything seemed quite simple: Guter Rat reader Christian Wöhner’s car was damaged in a parking lot. The question of guilt was clear, it was not questioned by the opposing party and the details of the insurance were changed. When Wöhner contacted the opposing insurance company, he was asked for a cost estimate for repairs. He can choose a workshop himself.

The problem

Wöhner was asked if he would agree to pay the repair costs based on this cost estimate and was also asked for his bank details. The injured party responded in the declaration and provided bank details.
No answer But now he waited in vain for the money. “I expected to not get the VAT back, I had read that somewhere,” says Wöhner. But the fact that there was no money for four weeks worried him. After all, it was a repair that cost several thousand euros.

Call again

It was only after several inquiries at the insurance service center that the matter began to move. However, she transferred less money than expected: the amount she paid was based on a much lower cost estimate from another auto repair shop. As Wöhner had relied on the statements made by the service staff over the phone and was unable to provide written confirmation of the arrangements made, he was stuck with the difference: “I’m now almost 1,000 euros short, which is very strange.”

Consumer Law

“For these reasons in particular, it is important that such agreements are always confirmed in writing and, ideally, that the repair is only carried out once this confirmation is received,” says Elke Weidenbach, an insurance expert at the NRW consumer advice center. She also recommends asking the other person to tell you their name.

Waiting time

However, it is normal that Wöhner had to wait so long for his money. On average, claims processing takes four to six weeks. The severity of the accident and the processing time with the insurance company affects the speed of payment.