Flood damage, expensive spare parts: premiums for vehicle and building insurance are likely to rise by ten percent

Highlights: premiums for vehicle and building insurance are likely to rise by ten percent. High prices for spare parts and car repairs have caused insurers to lose billions. Added to this are the costs of the flood shortly before Christmas. Many providers have therefore increased their prices at the turn of the year. The Christmas flood in Germany may not have been as expensive for insurers as feared, says GDV managing director Jörg Asmussen. In Lower Saxony and Bremen, only 30 percent of the houses are insured against natural damage. Nationwide it is now 54 percent.

High prices for spare parts and car repairs have caused insurers to lose billions. Added to this are the costs of the flood shortly before Christmas. This has consequences for consumers.

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Flood damage in NRW: increasing premiums

Photo: Marius Becker / dpa

Drivers in Germany will probably have to spend more money on car insurance next year.

As early as 2024, premiums in this segment are expected to rise by an average of ten percent, said the President of the German insurer association GDV, Norbert Rollinger.

In 2023, increased prices for repairs and spare parts caused motor vehicle insurers to lose billions.

Many providers have therefore increased their prices at the turn of the year.

According to Rollinger's assessment, profits are not expected again until 2025 - after further contribution increases.

According to the association, spare parts and repairs are likely to become more expensive in 2024.

Last year, motor vehicle insurers spent 2.9 billion euros more on claims, administration and sales than they earned in premiums.

The losses in the motor vehicle business also dragged down the result of the entire property and casualty insurance in 2023.

The division's underwriting profit fell by more than half to 1.5 billion euros, as the General Association of the German Insurance Industry (GDV) announced in Berlin.

The industry expects a further increase in premiums this year.

Building insurance is also likely to become more expensive on average by around ten percent, said Rollinger, whose main job is running the cooperative insurer R+V.

The Christmas flood in Germany may not have been as expensive for insurers as feared.

Luckily there was little damage to buildings, said GDV managing director Jörg Asmussen.

The GDV expects damage of around 200 million euros.

Of this, around 180 million were due to natural damage to buildings, the rest to vehicles and household goods, said Asmussen.

The fact that the sum is not higher is also due to the low prevalence of natural hazard insurance.

Because normal building insurance does not pay for flood damage.

In Lower Saxony and Bremen, only a good 30 percent of the houses are insured against natural damage, said Rollinger.

Nationwide it is now 54 percent.

The overall economic damage is likely to be much higher anyway.

Infrastructure such as roads and bridges are not insured at all.

The GDV advocates a halt to construction in flood areas, preventive regulations in the state building regulations and a nationwide natural hazards portal.

In addition, insurers should be obliged to offer their customers natural hazard cover in the future.

If you don't want it, you have to actively decide against it.

ssu/dpa

Flood damage, expensive spare parts: premiums for vehicle and building insurance are likely to rise by ten percent

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