A rise of between 0.50% – 1% in auto insurance prices is expected by 2022. In fact, auto insurance rates rise every year. How can we explain these increases? What are the best ways to save money?
In 2022, the auto insurance premium will rise by 0.50% to 1%
The Facts & Figures consulting firm forecasts an increase in the auto insurance premium from 0.5% to 1%, or even up to 2%. However, this increase should be close to 0% for the insured of mutual groups, says Cyrille Chartier-Kastler, founding president of the Facts & Figures cabinet.
This observation is still contradictory as 2020 saw a sharp drop of auto claims. This decrease is largely due the different crises posed by the coronavirus as well as the new lifestyles of French citizens. Telework is one of these new habits. Accordingly, the insured limit their travel by vehicle, which reduces the risk of car insurance.
Despite the fact that automobiles are less at risk due to the decreased number of claims and low circulation, insurance companies have been more cautious about other areas. This is what happened to insurance companies that covered the operation of companies and had to compensate them in the event of losses due to the pandemic.. Auto insurance contracts are therefore subject to this additional cost.
In 2020, the cost of auto repairs rose by more than 6 percent. This increase is most noticeable in the price of spare part.
There are many reasons why vehicle spare parts prices have risen.
- The rise in SUV vehicles is due to the addition of sophisticated parts. These parts are often difficult to make and therefore are very expensive.
- The Climate and Resilience Act, which entered into force on August 22, 2021, ended the monopoly on spare parts by car manufacturers. Independent repairers can therefore access the market. Prices are rising due to increased competition. Based on 230 vehicle models, the average price is + 5.8%
Additional explanations are provided by the Automobile Safety and Repair (SRA), regarding the rise in auto insurance premiums. Repairing a car is now more costly, especially because labor costs have increased by +3.2%.
GOOD TO KNOW: Some auto insurance companies have decided to freeze their premiums. This is especially true for MAIF and MATMUT as well as GMF
Families of France launch the first group home-insurance purchase. The goal: To reduce the premium on your insurance and to provide better protection, you can use the strength of numbers. Pre-registering is better because you will get a better offer. Registration is free and not binding.
Self-insured resilience after a rise: Is it possible?
It can be framed and is possible to in 2 contexts :
- anytime after a year of contract, without any proof thanks to Hamon law;
- The first year of the contract in the event that there is a change in circumstances (moving, marriage or birth, etc.).).
An increase in auto insurance premium can be grounds for terminating a contract. Many auto insurance contracts contain a clause that states that the insured can terminate his contract if the premium goes up. The insurance company will allow the insured to end his contract for a period of 15 days or 1 month after he is informed about the increase in premium.
It is important to note that an increase in auto insurance prices does not permit the insured to end his contract. In the following cases, this is not possible.
- If there is a penalty for one or more accidents, the price of autoinsurance will rise. The bonus-malus coefficient is taken into account when determining the price of auto insurance.
- If the price hike is explained by a modification in legal or regulatory tax.
- If the clause for auto insurance premium review is in the contract, the insured can’t refuse to increase his contributions.
- If the insured moves from a city dweller into a sports car, it is possible for the policy to be terminated. In this instance, the insurance premium will rise and it is impossible for the insured to terminate the policy.
Below is an example letter he sent to end his auto insurance after the rise in contributions.
Object : Request for termination of the auto insurance contract n ° following the increase in my contribution
Receipt of the Reception Letter
I hereby notify you that I would like to end my auto insurance policy [contract number]This is what binds us.
I will terminate my insurance contract because of the increase in auto insurance contributions from XX/XXX/XX. I will therefore invoke the termination clause in my contract as I refuse to accept this increase.
Thank you for sending me an Addendum to the Termination and for paying me, where necessary, the sums paid in Advance (reimbursement for the overpayment).
Madam, Sir, please accept my sincere condolences.
If the insurer refuses to terminate your contract and you are not satisfied with the decision, the auto insurance mediator can be contacted. Its role is to facilitate a settlement between the insureds and the insurance company.
⁇ Can we contest the increase in its auto insurance premium ?
In the event that your auto insurance premium rises due to a claim, you have two years to contest the increase. Insurance could make an error in the classification, which can directly impact your bonus-malus coefficient (and therefore your auto insurance premium).
It is possible for a car insurance company to contest the increase in its premium in these cases:
- If the driver is held unfairly responsible in the claim (s), declared to his insurance
- If the insured has a maximum bonus of 3 years and declares a claim, it should not have any effect on his bonus-malus coefficient. Article A 121-1 of Insurance Code states that the coefficient must not be increased for the first loss after a minimum of 3 years.
- When an accident is connected to a case involving force majeure: In this case, the legislation provides that the insured may not be subject to an increase
- In the event of an excessive penalty following a claim, the coefficient can only increase by 25% per responsible claim. The old coefficient gets multiplied with 1.25.
It is important that you remember that challenging an increase on your car insurance premium can lead to litigation against the insurance company. You must take contractual responsibility for your insurer from the moment you file a dispute.
TIP We recommend you challenge via registered letter with acknowledgment. Keep all evidence and exchanges with your insurer. If your insurer does not accept the legitimate dispute, you can join the insurance mediation.
⁇ How to save on your auto insurance in 2022 ?
In 2022, the average price of auto insurance will rise by 2% annually. France’s auto insurance is mandatory and can be a burden on a budget. There are however tips that can help you save on your auto insurance premium.
Say goodbye to all the guarantees that aren’t necessary
Many people who are insured get into the habit to take out multiple guarantees “just in case”. These guarantees are an extra cost and will not be used in most cases. It is important that you clearly define your needs and only subscribe for the necessary guarantees in order to limit the price increase of auto insurance.
Additionally, it is important to note that our lifestyles have changed significantly since the pandemic caused by covid-19. Even though most restrictions have been lifted, the French still spend more time at their homes, particularly with the advent of telework. This directly impacts insurance coverage. If you feel uneasy, we strongly advise that you examine your insurance contracts to see if any of the guarantees are still applicable today and make arrangements.
Take into account his profile as a driver
The auto insurance tariff is determined by several factors. The profile of the insured driver is another important factor. To save money, there are several good practices.
- You can ride flawlessly because you are rewarded with the bonus malus coefficient, which changes every year.
- If you decide to change your vehicle, keep in mind that its value directly affects the cost of insurance premiums and guarantees. A car of higher value will require more protection (anti theft device, garage parking, etc.). ;
- Your driver profile may influence how you adjust your contract. Third-party insurance may be sufficient for occasional drivers who drive a low-value vehicle.
- Small rollers, i.e., those who are not skilled at rolling, can benefit from insurance per kilometer.
- You should consider covered and secure parking (garage or shelters, etc.).
Favor online auto insurance
Online auto insurance companies are often much cheaper. Online insurance doesn’t have a network that includes physical agents. These lower management costs are passed on to auto insurance.
The subscription can be done online and is effective immediately without the need for intermediaries. The final price is therefore lower.
Compare and renegotiate the terms of your auto contract
Comparing car insurance is the best way to find an average contract that meets all your expectations. Simulating car insurance quotes will give you an overview about the market and the prices available for your insurance needs.
Being interested in your contract is a good thing. To save money, you must understand what you need.
You can also negotiate a lower auto insurance rate if you already have insurance and are looking for low-cost auto insurance elsewhere. Here is an example of a comparison car insurance offer.
- Opt for an annual payment for your auto insurance. Insurers often increase the monthly and quarterly insurance contributions. Opting for an annual payment can also result in a reduction.
- For young drivers, consider driving accompanied to receive a reduction on your car insurance premium.
- Collect your insurance contracts: When multiple contracts are with the same insurer, it’s possible to get a better tariff or renegotiate his auto insurance more easily.