Competition pushes cost of auto insurance down 40 pct

eKathimerini — Greek car insurance rates have dropped  40 percent since  2010  giving cash-strapped motorists a much-needed break. The reduction is a result of intense competition between insurers in a shrinking market, which has pushed rates to as low as 200 euros a year – the average cost across the country for third-party insurance of a standard car.

A study of the current rates shows that insuring a car with a 1.4-liter engine in Athens that has been in circulation for four or five years costs between 220-280 euros per year, compared with 365-465 euros in 2010. At end-July this year, the number of insured cars in Greece came to 5.8 million, from around 5.5 million at the end of 2015, a trend that professionals attribute to reduced insurance rates.

Market professionals believe that the level of insurance policies will not be affected by plans to raise the minimum rate of coverage for personal injury/death or material damages per accident to 1.2 million euros. The hike is scheduled to go into effect in 2017 and is the result of an automatic adjustment dictated by a European Union directive, though it is not expected to have an impact on consumers in terms of the insurance rates they pay. The reason, a source in the industry explains, is that this regulation pertains to compensation sought via litigation.

What is of concern to the industry is the gradual rise in the rate of damage claims, which has inched up to around 8 percent of all claims from 5.5 percent in previous years. The increase in vehicle damage claims means more payouts and less profits for insurers, undermining the robust performance of previous years.