Car insurance premiums do not remain constant over the years, but are directly related to the number and severity of road accidents and consequently to fuel consumption and road traffic. If there are more vehicles on the road, then it makes sense to increase the chances of road accidents.
During the pandemic, due to the significant reduction in fuel consumption and new registrations, a large reduction in traffic was observed. This had the natural effect of reducing premiums.
But now, there is again an increase in travel, hence a large increase in road accidents. An important factor that burdens car insurance premiums is the increased cost of repairs. Increased repair costs lead to an increase in compensation from insurance companies and consequently to an increase in insurance premiums. In recent years there has been a large increase in the prices of car parts, which increase by 6% compared to 2020 and 44% compared to 2013, according to a survey by the German Insurance Agency (GDV).
Another factor influencing prices is that vehicle technologies have become more sophisticated and the materials needed are more expensive. Indicatively, the replacement prices of the trunk have increased by 60%, while the prices for luminaires have increased even more (67%).
Car insurance is essential for all vehicles in motion. If there is an accident or damage, if the vehicle is stolen or if there is a natural disaster, the car owner should be compensated.
The age of the driver plays an important role in shaping the final premium, which is one of the most important criteria in shaping the insurance plan. A new driver, in addition to the premium he pays, is more prone to accidents. That’s why younger and more inexperienced drivers pay higher premiums than a 40-year-old experienced driver.
If the driver has the diploma for less than one year, he pays a premium until he turns 23 years old.
Place of residence is another key factor. This is because insurance companies know which areas have the most accidents. Thus, respectively, there are increased prices on car insurance. Usually, large urban centers have higher prices, in contrast to the province which enjoys lower prices in insurance due to lower risk.
The cubic capacity and the type of vehicle affect the insurance prices and the final cost of the premium. Faster cars, as well as sports cars, usually pay higher premiums as they are considered higher risk.
End, the shorter the insurance period, the higher the premiums will be. An annual insurance offers savings of up to about 40% compared to a monthly insurance and about 20% compared to a six-month insurance.
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