Car insurance premiums are set to increase by more than 5% this year, putting Belgians under further financial strain at a time when many are already struggling to pay their energy bills and keep their businesses afloat.
According to a recent study by l'Echo, inflation, heavier post-pandemic road traffic, and a rise in the real value of vehicles are the main reasons for the forecast 5.3% hike in premiums over the course of 2023.
In particular, the study found that AG Insurance and Axa customers will have their premiums increase by an average of 4.5%; those at Corona Direct by 5%, customers at Baloise by 5.3%, and those at Belfius by 6%.
Furthermore, Federal Insurance (Fédérale Assurance) has indicated that it will raise its premiums by anywhere from 3.5% to 8% depending on the type of contract, while KBC has announced that it will not raise its premiums for existing contracts.
More traffic, more problems
One major cause of the expected premium hike is increased road traffic, as many Belgians become increasingly comfortable leaving their homes as memories of the Covid-19 pandemic continue to fade from public consciousness. This, in turn, has led to an increase in the frequency of accidents and, hence, insurance claims — thereby pushing up premiums.
"We are carefully following [the increase in claims'] evolution," Florence Baudewyns, a spokeswoman for Baloise, told l'Echo.
A second important factor behind the rise in premiums is the increase in costs of repairing a vehicle, which in turn is largely a consequence of Europe's current soaring inflation rate.
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"The cost of material damage has increased due to inflation, and more particularly to the increase in the cost of spare parts and their delivery, the cost of painting, the energy used during the repair and the hourly cost of labor," explained Philip Bossuyt, a spokesperson for Axa.
The final reason for premium hike is the rise in the real value of the cars hitting Belgium's streets. In particular, the real value of a recently purchased vehicle in Belgium has increased by 11% since March 2020: a result of Belgians' increasing predilection for buying expensive SUVs and electric vehicles.
As Ethias spokesman Serge Jacobs pointed out, such vehicles require "a more expensive repair than a traditional sedan car" — and, hence, push up the overall premium rate.
