SWITCHING insurers, a popular money-saving tactic by drivers who are looking to renew their third party liability car insurance, might not bring the reductions it has done in recent years. The number of drivers who are having to pay increased prices for third party car insurance – often by as much as several hundreds crowns - is increasing, the Sme daily has reported.
Last year, about ten percent of car owners switched insurance companies in order to get a lower price. Sometimes just threatening to switch was enough to get a discount. However, insurance companies are now much less willing to provide discounts or bonuses on renewal. This is partly due to an amendment to the law on compulsory third party liability car insurance.
The amendment requires that insurance companies provide higher limits for insurance settlements as of next year. If insurance companies have to pay more on insurance claims they will pass the cost on to customers through raised insurance prices, Sme wrote.
The price of the third party liability car insurance has stagnated in the past few years as a result of strong competition, and despite the increasing average price of cars. According to analysts, competition has pushed down insurance rates to their lowest possible limit. Now the insurance companies are starting to feel financial pain. And apart from the raised limits of insurance settlement, the ongoing crisis in the world financial system is making insurance companies increasingly cautious.
