Auto insurance will increase by more than 5% this year

Inflation is not the only cause. The recovery in post-covid traffic, sophisticated equipment or even the real value of vehicles also explain the increase in premiums.

Premiums for existing auto policies will be subject to a average increase of the order of 5.30% when they next expire, sometime in 2023, according to a market analysis by L’Echo.

5.30%

indexing

On average, this is the increase that the premiums of existing car contracts will experience in 2023.

In detail, both AG Insurance thatAxa expect an average increase in their contracts of around 4.5%. Corona Direct figure the average increase to 5%Baloise to 5.3% and Belfius at 6%. Federal Insurance announces a range that goes from 3.5 to 8%.

On his side, KBC indicates thatan increase in its car premiums for existing contracts is not on the agenda. The bank-insurer nevertheless specifies that it closely monitors the evolution of costs.

Rising costs

What costs are we talking about? Auto insurance premiums, and more generally IARD (Fire, Accident and Miscellaneous Risks) insurance premiums, change according to the claims frequencys, of average cost of claims (repair, replacement, compensation), doverhead costs of the insurer (whose salaries) and cost of reinsurance.

Baloise thus points out that the resumption of post-covid activities has influenced the frequency of claims. “We are closely monitoring its development,” said Florence Baudewyns, its spokesperson.

“The cost of material claims has increased due to inflation, and more particularly to increased cost of spare parts and of their deliveryCost paintof theenergy used during repair and the hourly cost of workforce“, explains Philip Bossuyt, the spokesperson for Axa.



More and more sophisticated equipment needs to be repaired, which inevitably takes more time and costs more.

The latter also specifies that it is necessary to repair increasingly sophisticated equipmentwhich necessarily takes longer and costs more, given the necessary use of a skilled workforce, trained specifically to these components. This is for example the case of bumpers with integrated sensors and cameras.

Lcurrent euro exchange rates against other foreign currencies also work against Belgian motorists, as some spare parts come from abroad.

Julien Hayen, the spokesperson for P&V, specifies that not all of these increases are fully reflected in premiumsbut that they are nevertheless also influenced by the real value of the cars. However, this has increased, both for new vehicles – 11% since March 2020 – and for used vehicles.

New contracts

Should we conclude, for an identical vehicle, that an omnium taken out in 2023 will be more expensive than in 2022? For Axa, Ethias and KBC, there is no doubt, since insurance premiums are based on the catalog value of the vehicle. AG Insurance figure even this increase at 2.5% on average.

Same story at Corona Direct, which expects an average increase of 2%, while qualifying its response. “The increase in the price of vehicles can have an effect on omnium insurance, but it must be relatively significant for this to be the case”, explains Caroline Stevens, its spokesperson.

At last, Federal Insurance announces thata price increase insurance for a new vehicle in 2023, compared to 2022, is not planned nowadays.

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