Increasing damages driving up car insurance premiums

Car crash numbers are up in 2018. Source: Olev Kenk/ERR

An increase in the number of car crashes as well as increasing damages have driven up motor third party liability (TPL) insurance premiums in Estonia 15%.

According to Estonian Motor Insurance Bureau (EKF) data, the first half of 2018 has seen a total of 17,750 TPL insurance claims, the average damages of which totalled €1,953.

The average annual TPL insurance premium is €139. Compared to the same time last year, average damages have increased 17%, while insurance premiums have gone up 15%.

The recent increase in insurance premiums has been the result of the steady increase in the number of crashes and the average damages nearing nearly €2,000, said EKF chairman Mart Jesse.

"While more and more vehicles equipped with modern safety features are appearing on the road, which should help prevent crashes, people's regard for fellow drivers has unfortunately declined," he said. "A vehicle running a red light or a car passing in a no-passing zone are no longer a rarity in traffic."

While car insurance providers saw €1.7 million in losses from TPL insurance in the first half of last year, this year they have earned a profit of €400,000 in the first six months. A total of €52.3 million has been paid in insurance premiums in the first half of 2018, up 17% on year.

"The six-month results of TPL insurance have turned a small profit for the first time in six years, but there is no reason to celebrate, as half a year still lays ahead," Jesse noted.

The most expensive loss event of the first half of 2018 took place in February, when a truck driver under the influence of alcohol drove in front of a passenger train, causing the train to derail.

According to Caterina Lepvalts, manager of the Claims Settlement Department at ERGO Group, the damages related to the loss event significantly exceeds the €1.2 million compensation limit for property damage, but the final price tag is still in the process of being determined.

Editor: Aili Vahtla

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