Motor vehicle: Significant price increases in car insurance

Millions of car owners in Germany are expected to face significant price increases from their insurers by the end of the year.

Motor vehicle: Significant price increases in car insurance

Millions of car owners in Germany are expected to face significant price increases from their insurers by the end of the year. According to surveys by the comparison and sales portals Check24 and Verivox, vehicle insurance rates have risen by a double-digit percentage since last year.

Above-average price increase

According to Check24, a motor vehicle liability policy cost an average annual premium of 304 euros in October. That was around 30 euros or around eleven percent more than a year before.

According to Verivox's motor vehicle insurance index, contracts for the insurance types - liability, partially comprehensive and fully comprehensive - have become 13 percent more expensive on average, and even 15 percent more expensive in the cheaper lower price segment. The Heidelberg company calculates the index in cooperation with statistics expert Wolfgang Bischof from Augsburg University.

Bills are coming soon

The contribution bills for the coming year usually come in November and December. "That's why many insurers will inform their customers about premium increases in the coming weeks," says Michael Roloff, managing director of motor vehicle insurance at Check24. The Munich-based company assumes that insurers will increase prices for existing customers more than the tariffs for new customers.

The reasons for the price increase

But why is car insurance becoming so much more expensive even though general inflation fell to 3.8 percent in October? According to their own statements, the insurers are reacting to above-average cost increases. In the summer, the General Association of the German Insurance Industry (GDV) predicted a loss of over 2.5 billion euros for its member companies' car policy business this year. Expenses for repairs, spare parts and wages therefore rise significantly faster than contribution income.

“We are experiencing price increases on a historic scale,” says Wolfgang Schütz, managing director of Verivox Versicherungsvergleich. These premium adjustments are urgently needed for insurers. “Inflation-related increases in repair costs and increased loss rates are sending the division deep into the red this year.”

Hardly any chance of cheaper insurance

For this year's "changing season" this means that car owners probably can't have too high hopes of finding actually cheaper insurance. There is a greater chance of mitigating the price increase by changing insurance. “However, there are also insurers who reduce vehicle insurance premiums in individual segments and offer low prices for new customers,” says Check24 manager Roloff.

As a result, the price war among motor vehicle insurers has already begun: compared to summer 2023, prices have fallen slightly again. In recent years, motor vehicle liability premiums have reached their annual low point in November.

Liability, partially comprehensive, fully comprehensive

The portals have a very good overview of the market, as many insurers sell their policies there. At the same time, as online insurance brokers, they have a financial interest in ensuring that exchange business is as lively as possible.

Liability is required by law and covers damage that the car owner causes to other people's belongings with his vehicle. Damage to your own car is not covered. If you also want to insure this, you must choose comprehensive insurance. Like many terms in the financial world - such as gross, bank or credit - "Kasko" also has Italian origins: "Casco" means protective or steel helmet, and thus, in a figurative sense, self-protection.