Car insurance premiums rise due to competition and more costly repairs

The cost of car insurance has shot up over the past year, with liability insurance premiums rising 20%, according to research by comparison website Independer.

The price of a fully comprehensive package has risen 9% on average, while limited liability packages are up 15%. Youngsters have been hardest hit by the increases and now pay an average of €1,012 in car insurance, compared with €884 a year ago, Independer said.

Rudi Buis of the Dutch insurance association told broadcaster NOS  insurers have been competing on price and that has had an impact on their income and prompted rises. ‘In 2014, insurance companies paid out €300m more in damages than they got in and that is not a healthy situation,’ he said.

The central bank has also urged the sector to get its house in order, NOS said.

Complicated

In addition, repairs are becoming more expensive, Buis said: ‘A car used to have a simple bumper but now it is full of equipment, sensors and cameras. And that makes repairs cost more.’

In 2010, the average repair bill was €1,360 but that has now risen to €1,900, he said.

Personal injury claims cost €1.2bn in payouts but the percentage of that paid to lawyers is also rising, Buis said. ‘We don’t understand why and we want to talk with the legal profession to find out.’