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One last rush

Insurance companies may have miscalculated with the extensive discounts they give annually in the season to sign new mandatory vehicle insurance contracts, which could well bring a significant rise in prices in the near future.

According to the portal, the broad range of attractive offers mean that some 90% of motorists, or 3 million people, could achieve savings of more than HUF 10,000 by changing providers, an all time record. The average HUF 12,000 discount means that the average annual fee on vehicle policies could drop below HUF 20,000.

The majority of those first to sign new contracts enlisted with Allianz, K&H, Astra and KÖBE. However, the portal noted that these companies have little cause for celebration, since they gained clients at such low price levels that it could well drive their vehicle businesses into the red.

The initial figures reveal that Allianz, Uniqa, Aegon, Genertel and Generali were the companies with the most policy terminations. However, many of their customers immediately signed back on to take advantage of the 2010 season’s bargains.

But this year’s campaign will also result in losers, especially Budapest residents who tried to dodge paying higher fees by registering their cars to family members living in rural locations where tariffs are lower. The portal pointed out that the changes in regulations for 2010 entail that the policy payments will have to be made by the actual operator, not the legal owner of the vehicle starting next year. Accordingly, 50,000 to 70,000 motorists will certainly see their monthly installments grow despite the beckoning discounts.

Overall, claims that the drastically reduced market prices will likely compel many smaller insurers to follow the earlier example of AIM and simply opt out of taking part in the vehicle policy campaign as it is no longer a viable business niche. Narrowing competition and rock-bottom prices mean that the fees have probably gone as low as they will go, so motorists are encouraged to take advantage of the offer while it lasts. (BBJ)