Car insurance premiums continue to go down

More and more car insurance providers, ever lower premiums: This is the conclusion after looking at the average premiums. If you compare the last three years, you can see that premiums have fallen by around 15 percent (sometimes even more). This means that the pressure on insurers is high, but not everyone is giving in to the price war. Quite a few are sticking to their high premiums, clearing the way for direct insurers who offer high margins for low premiums. It is quite noticeable that new providers are still entering the market. Thanks to modern Internet offers and lean administration, they are able to offer cheap premiums for car insurance.

It is interesting that the individual vehicle classes sometimes differ greatly. The vehicles that are assigned to the upper middle class can currently be insured particularly cheaply? A good insurance comparison is of course provided. Fully comprehensive insurance is also cheaper for these vehicles than for many others, which have a significantly lower new value. Mid-range vehicles and small cars, for example, are showing relatively small premium declines, so that the insured cannot save quite as much here. Which of course does not mean that saving is not possible here! However, the differences between the providers are smaller, so the comparison is more complex.

So the premiums have gone down

So what explains why auto insurance premiums have fallen over the last three years? Experts assume that the increased competitive pressure is the main reason for the premium reductions. On the one hand there are car owners, who have (and use) more and more opportunities to obtain information. You compare more closely and then just switch to the cheaper provider. On the other hand, insurance providers are also taking advantage of the digital possibilities and processing claims digitally. You need fewer staff, the entire administration is streamlined. This in turn means lower costs and the ability to pass some of the cost savings on to policyholders. In turn, the insured are happy and the corresponding providers are recording higher growth rates.

Many insurers only offer their products online and are fully committed to digitization. This makes work a lot easier, everything is possible automatically. At this point, too, this means that fewer staff are required. Some of the few employees have even been in the home office for more than a year, which in turn reduces office costs.

Another reason could be held responsible for the falling premiums. Since the beginning of the corona pandemic, people have traveled far less by car. As a result, fewer accidents happened and therefore a smaller number of claims had to be settled. The insurers have not booked everything as net profit, but are therefore able to reduce the premiums for the insured. However, it remains doubtful whether this reason will continue in the near future, because people's mobility has long since returned to the pre-corona level.

Conclusion: Cheaper premiums in car insurance possible

If you want to save, you have to compare car insurance every year and ideally switch to the cheapest provider. It has never been easier to find a cheap insurer, because the premiums are falling for almost all insurance companies. So it is important to make a comparison year after year and switch to the provider who, for example due to ongoing digitalization and further cost savings, can pass the latter on to the insured person.