Annual rates for vehicle liability insurance in Hungary are expected to rise 10-12% on average, reaching HUF 22,000-25,000, due to increasing car usage and a growing number of insurance payments, according to an analysis by insurance broker Agenta-Consulting sent to the Budapest Business Journal on Tuesday.
Despite the foreseen rise, which reflects a rising tendency since 2010, the average price of vehicle liability insurance will be well below the 2007 record, when the annual average was HUF 35,120, according to data from the National Bank of Hungary (MNB), the company says.
A main driver of the rising prices, Agenta sees, is the increasing tendency of car usage on Hungary’s streets, chiefly boosted by dropping vehicle gas prices. Due to the increased car usage, more accidents occur on the roads, and therefore more insurance payments are being completed. According to calculations by Agenta, the average repair cost of vehicles is around HUF 300,000.
“Based on the experiences of the last few years, 90% of motorists contract with insurance providers offering the lowest prices, though other factors should definitely be considered,” said Zoltán Kőrösi, managing director of Agenta, which is owned by Keszthelyi Holding. “Quality is an important point, as well as reliability and other complimentary services, such as active damage control, providing an international Green Card, etc,” he added.
Agenta noted that although the number of motorists changing insurers at the end of the year, a common practice in Hungary, is gradually decreasing, one third of motorists are still affected. However, a recently adopted legislative amendment restricts insurers from offering new clients cheaper services than already existing clients, so that the number of those changing insurers or signing new contracts is expected to drop, Agenta added. The number of changes is estimated by Agenta to reach around 100,000-120,000, including those who will need new insurance due to MKB leaving the market, a figure that represents an almost 50% drop compared to 2014.