(Photo credits: © Jo Panuwat D – stock.adobe.com)
Inflation, repair costs, natural disasters… insurance companies are facing big problems. This has resulted in car and home insurance becoming more and more expensive.
At the end of September, the insurance companies and Economy Minister Bruno Le Maire discussed the future price increase on car and home insurance contracts. A meeting which gave some ideas to preserve the budgets of the most fragile households, but which still will not be able to completely stop the phenomenon of increasing contributions.
The insurance companies’ solutions to preserve the purchasing power of the French
Bruno Le Maire called on insurance companies to moderate the increase in their rates, which will take place at the beginning of 2023. But faced with cost concerns, insurers have made only a few concessions to him. Young people under 25 who are unemployed will thus benefit from a €100 car check to help them pay the bill, which is often very expensive due to a still low bonus-malus coefficient.
In addition to this general boost, some insurers have made specific commitments. This is the case with Macif and Matmut, who have decided to make commercial moves aimed at students and owners of electric cars. Measures that will not succeed in stopping the contribution increase are expected to be around +3 to +5% in early 2023 for all car and home insurance contracts.
Also read: Car insurance: big increases expected for owners of SUVs and electric cars
Why will home and auto insurance rates continue to rise?
Through their rate increases, insurance companies seek to compensate for the increase in claims costs. On the car insurance side, prices for repairs and spare parts are skyrocketing. in the question? The overall increase in materials, the price of labor, but also the increasingly large proportion of SUVs in the French car park, which are particularly expensive to repair. In comparison, the price of bumpers has increased by 5.2% for sedans, against 10.5% for SUVs, i.e. twice as much!
Home insurance, for its part, faces another challenge: climate risks are more and more frequent, leading to expensive repairs to the affected houses and apartments. Floods, droughts, fires… so many phenomena linked to climate change, which will become more pronounced over the next few years. Banque de France’s Prudential Control and Resolution Authority expects a price increase for these contracts of between 130 and 200% over 30 years.
Other government proposals to curb price increases
In addition to the directly visible measures for the purchasing power of the French, the government relies on two other solutions to limit the phenomenon of rising car and home insurance prices. First of them: remove the green card affixed to the windshield of vehicles. A measure that makes it possible both to reduce the costs associated with printing and sending these documents for insurance companies, but also to limit the ecological impact of this small piece of paper.
Second government incentive: to use more recycled parts, that is, used spare parts, to repair vehicles at reasonable prices. Despite this, we must still expect a significant increase in the prices of the various contracts in 2023. On the home insurance side, professionals in the sector estimate the minimum increase at 3% with up to 5% according to the high estimate. the company Fakta og tal. Same story for car insurance, whose increase is also expected around 3 to 5%.