The pandemic maintains the stability of French car and home insurance

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The price of car and home insurance in France is expected to remain stable for most of this year and 2022, but both are expected to increase significantly in 2023.

Auto insurance rates are expected to rise only 0.5 to 1% next year, according to Facts & Figures, a strategy and management consultancy specializing in European insurance.

Traffic restrictions due to Covid-19 have meant less road traffic and therefore fewer accidents, helping to lower insurance costs.

In 2020, the average cost of a car insurance contract was between € 373 and € 597 per year.

Several insurance companies have frozen the price of insurance policies for the remainder of the year.

From January 1, 2022, only Maif plans to maintain this freeze.

However, the average increase expected by its competitors is expected to remain below the inflation rate, which is expected to hover around 1.4% next year, the Banque de France said.

But price stability is not expected to last long, with hikes of 2-3% slated for 2023.

This is due to several factors.

The first is that the price of auto repairs continues to rise sharply.

In addition, there has been a huge increase in sales of expensive SUVs and electric vehicles, and their rarer and more expensive spare parts pose increased risks for insurers.

Owners of high-end vehicles (BMW, Mercedes or Audi) generally prefer to go to a dealership, where the prices are higher than at the garage. At the same time, the price of spare parts increased six times faster (3.6% per year) than car insurance premiums between 2020 and 2021, business and business magazine Capital reported.

The cost of windshields increased 5.2% between 2019 and 2020, while the price of paint ingredients climbed 4.2%.

Home Insurance

A similar trend is expected for home insurance.

The fact that closures in 2020 mean people are spending more time at home has led to a decrease in thefts.

In 2022, the increase in the cost of insurance should therefore remain moderate, in the order of 1% to 1.5%.

But, just like for cars, “an acceleration in the dynamics of rising home insurance rates is highly likely by 2023,” says Facts & Figures.

Insurers are increasingly penalized by the increase in climate risks. Natural disasters cost on average 2.4 times more expensive between 2016 and 2020 than over the period 2011-2015, according to the Caisse Centrale de Réassurance.

The main cause is the lack of rain: “Suburban houses built in the 1950s and 1960s are the main risk for insurers. Too dry soil subjected to sudden rains swells the soil and threatens the foundations of properties, ”explained Cyrille Chartier. -Kastler, Founder of Facts & Figures.

The cost of drought is almost a billion euros each year. A figure that has almost quadrupled for insurers.

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