The situation in the motor vehicle insurance market is tense. Expenses significantly exceed income. A few days ago, the “cheapest insurer in Germany” Huk-Coburg announced that it would increase premiums by a double-digit figure, like last year. Verivox confirms the trend in a short analysis – and recommends that customers make a change. This is of course due to the Heidelberg comparator’s business model, the advice could appeal to customers.
Shortly before the start of the changing season in motor vehicle insurance, the price spiral turns. On average, vehicle policies are currently 21 percent more expensive than last year, as the vehicle insurance index from the comparison portal Verivox shows. However, this does not mean that prices for existing contracts have reached this level.
Changing insurance could help, as drivers have the opportunity to save up to 31 percent, it goes on to say.
The highest price increases relate to liability insurance, where costs have increased by 25 percent. The premiums for partially comprehensive insurance are 21 percent and for fully comprehensive insurance 20 percent higher than the previous year.
“The first insurers have updated their tariffs and are implementing further price adjustments,” observes Wolfgang Schütz, Managing Director of Verivox Versicherungsvergleich GmbH. “Last year’s price increases were not enough to compensate for the motor vehicle insurers’ deficits.”
At the beginning of the year, Bafin intervened and asked insurers to take further measures – i.e. to increase premiums. Divisions with permanent losses cannot be accepted, reported chief supervisor Julia Wiens. Meanwhile, we can hear from the market that providers will probably only start making profits from 2026. A combined ratio of around 105 percent is expected across the market this year.
The problem for motor vehicle insurers: While the general price increase has recently fallen significantly, the claims inflation relevant to insurers remains high. Contributing factors include higher spare part costs and hourly rates in the workshops.
Huk-Coburg predicts that spare parts will also increase in price by 6 percent to 7 percent this year. The hourly rates in the workshops have recently increased by almost ten percent. For some repairs, especially for electric cars, the people of Coburg receive bills of up to 400 euros per hour.
“Despite the necessary price adjustments, low prices for those willing to change remain an important sales tool for insurers,” explains Schütz. “By switching insurance, you can continue to benefit from low prices for new customers.”
According to Verivox, drivers would save a quarter of their premium if they switched. The difference between the medium and the affordable price segment for people changing insurance is on average 26 percent. The savings potential is greatest at 31 percent for those with liability insurance.
Verivox calculates the vehicle insurance index together with statistics expert Professor Wolfgang Bischof from the Augsburg University of Technology. The user calculations at Verivox from September 1st to 25th, 2024 and for the same period in 2023 were anonymously included in the evaluation. The statistical model shows the price development for people switching insurance.
Author: VW editorial team