Auto insurance policies followed or exceeded year-on-year inflation in the country / on the day
Vehicle insurance rose to the maelstrom of increases in almost all areas of the country’s economy. According to different sources consulted, the increase between the quotas of February last year and that of this year exceeded at least 100 percent. The owners of the vehicles juggle to pay the monthly fee without losing coverage in the event of possible accidents.
One of the tools that insurer clients have had to keep the coverage almost intact and lower the value of the monthly payment a little is to bet on raising the franchise and thus reduce the price of the monthly fee.
The excess is the part that the insured pays when facing the costs of a repair. For example, if you have a franchise of 80,000 pesos, in the case of having to face a repair of 300,000 pesos for the car you own, you must pay 80,000 pesos in the workshop and the rest is covered by the contracted insurer.
There are cases that raised the fee by nearly 100 percent, even raising the amount of the franchise twice a year. For example, a Ford Ka, model 2016, with all-risk insurance, paid a fee of 12,000 pesos in February 2022. And in February of this year he faced a payment of more than 22,000 pesos. If the franchise payment modification has not been made, the fee could be close to 30,000 pesos, according to the client of one of the main insurers that works in the City.
One of the explanations offered by insurers is linked to the increase in the price of vehicles. It should be noted that if the price of the zero kilometer rises, this change in the value of the vehicle spills over to the rest of the older models.
Those who follow the automotive market observe that month after month the values rise without brake and that is one of the reasons why the price of the monthly insurance premium grows.
In another insurer with a strong presence in the City, they stated that the adjustments are being made on a quarterly basis. The new prices that are informed to customers generate surprise and anger due to the strong percentage of difference between four-month periods. “It’s a huge blow to the pocket,” summed up one of the clients.
Meanwhile, from the insurers they emphasize that the last numbers they made between collections and payments (for total damage, theft of covers, spare parts and other expenses) are “overwhelmingly” negative due to inflationary behavior.
One of the insurance producers told this newspaper that “it can be said that in some cases there was hyperinflation for different responses that rose above 200 or 300 percent.”
Despite the fact that no vehicle can circulate on the streets and routes of the country without civil liability insurance for damages to third parties, as established by current legislation, different sources consulted indicate that between 50 and 60 percent of the vehicles have the current insurance coverage.
According to data provided by the Association of Argentine Component Factories (AFAC), at the end of 2021 there were around 15 million vehicles between individuals, light commercials, and heavy commercials. Motorcycles, ATVs, agricultural machinery and trailers are not taken into account.
The basic insurance that the owner of a car needs to march through the streets correctly is civil liability towards third parties. An insurance that civilly covers the contracting party against claims or lawsuits for injuries and/or deaths that could be caused to others (pedestrians, cyclists, motorists and/or their belongings: car, house, bicycle, etc.). According to the Traffic Law, it is mandatory to have a policy of these characteristics to circulate throughout the national territory.
REASONS FOR INCREASES
According to the chambers that bring together the insurers, there are three reasons that justify the impact on their user portfolios: inflation, the price of imported inputs and the lack of tires. In the latter case, once an attempt was made to regularize the stock to have the tires available, there were very strong increases that decalibrated all the savings that required this essential element for vehicles.
Different executives from insurance companies agree that the generation of the insurance price is linked to the frequency of claims (amount), to their cost (how much does it cost to repair a claim), and to the operating expenses they have the insurers.
Experts in the field of auto insurance point out that there are some variants to try to lower the price of insurance. One is to change the company, but in this case you have to see the background of the same, because there are some cases that with prices that seem very attractive do not comply when you need the assistance of that company; Another option is to modify the franchise, those who raised this value managed to lower fees from 21,500 pesos to 17,800 pesos, according to the company; The range of coverage can also be evaluated low (going from an all-risk insurance to a complete third party with hail).