Insurers’ hands are tied. OC down again

Insurers’ hands are tied.  OC down again

Insurers’ hands are tied. OC down again

The third party liability insurance market is again a surprise – contrary to all predictions, the prices of compulsory vehicle insurance have fallen again – the average cost is PLN 495 – according to the latest report by RMF FM and Rankomat. “It seems that the insurers’ hands are tied” – says the company’s expert, Grzegorz Demczyszak. Raising prices by one company will result in an outflow of customers to another company, and increases in all companies will be investigated by the Office of Competition and Consumer Protection. And drivers in the next year will face changes – above all, higher fines.

After October, when prices in most regions increased for the first time in years, breaking the barrier of PLN 500, we recorded significant drops. But even despite this, the annual rate of reductions is slowing down – today it is 11.3 percent. cheaper than last year. In September it was 16 percent, in July 18 percent, even though it was more expensive than today.

OC prices November 2021 vs November 2022

year sum reduction
2021 558
2022 495 11.3

OC prices from 2021

from 2021 OC price
January 630
February 606
March 597
April 620
May 616
June 605
July 606
August 605
September 596
October 576
November 558
December 553
Jan.22 543
Feb.22 544
Mar.22 537
Apr.22 515
May 22 513
Jun.22 499
Jul.22 497
Aug.22 499
Sep.22 499
Oct.22 501
Nov.22 495

This is because the previous year gave us large reductions in the rates of OC policies. Then, in 12 months, the average price dropped by almost PLN 80. Later, these declines were not so noticeable, which can be seen in the statistics.

In the last month there were no exceptions among 16 voivodeships.

Third party liability price November 2022, provinces

Subcarpathian 413
Opole 427
Świętokrzyskie 434
Lublin 435
Podlaskie 441
Silesian 453
Lesser Poland 454
Warmian-Maz. 467
Lubuskie 469
Greater Poland 473
kuj-pomorskie 490
Lodz 507
West Pomeranian 516
Lower Silesia 534
Masovian 547
Pomeranian 584

We recorded reductions in all voivodeships – says RMF FM analyst Rankomat Grzegorz Demczyszak – The largest of them in the Lublin region and Pomerania, in the amount of PLN 15 and PLN 16.

The situation was somewhat different in large cities, where reductions, if any, were definitely more pronounced.

Drivers from Opole, Wrocław and Rzeszów could count on a reduction of about PLN 30. However, in some of them we also noted increases. The largest in Łódź, at PLN 17, then in Gorzów, at PLN 13, and in Poznań at PLN 9.

Smaller increases took place in Warsaw and Białystok.

OC price in November 2022, cities

voivodship city
Opole 445
Rzeszow 466
Katowice 478
Kielce 478
Lublin 485
Bialystok 509
Bydgoszcz 520
Olsztyn 520
Gorzow Wielkopolski 526
Cracow 532
Poznań 582
Szczecin 588
Warsaw 618
Wroclaw 623
Łódź 626
Gdansk 679

For many months, experts have been warning – this bubble must burst. It has not been so cheap for years, and everything in the surroundings is getting more expensive.

Although some insurance companies have already increased the prices of compulsory insurance, the increases usually concerned selected groups of drivers, especially those who do not drive safely. With so much competition, it does not have a significant impact on the average prices calculated for the entire TPL market – says Rankomat expert.

So the fight for the customer continues, and with such a simple product as the OC policy, the only way to compete is the price war.

Observing the current price situation, we can be tempted to say that insurance companies have their hands tied. Pan increase in policy prices in only one company means a loss of a customer for him, because he will leave for the competition. On the other hand, it is not possible to raise the rates jointly by all insurance companies, because the Office of Competition and Consumer Protection could consider it an unlawful price fixing – explains Grzegorz Demczyszak.

Since the beginning of November, insurers must also comply with the recommendations of the Polish Financial Supervision Authority, which should also affect the rates of third-party liability policies, but this is not visible in the data yet.

As the Rankomat analyst points out, the recommendations of the Polish Financial Supervision Authority do not directly relate to the prices offered by insurance companies: They only indicate the expected manner of conduct of insurers in the scope of organization and management of the claims handling process. In this way, the KNF wants to ensure the compliance of insurance companies with the law and prevent infringement of the interests of the insured and policyholders. Of course, compliance with the recommendations of the Polish Financial Supervision Authority and raising claims handling standards, with high inflation and increasingly higher prices of spare parts and services, should force some insurers to raise their OC rates.

And will it happen? We’ll find out in a few months.

Polica OC is compulsory insurance for every vehicle registered in Poland. There is no discussion with this provision, even if we do not use the car or it is damaged.

In no case you cannot neglect the purchase of an OC policy for a car registered in Poland – reminds the Rankomat expert. According to the law, even if it is not used, it should have a valid liability insurance. This obligation also applies to persons who are owners of seriously damaged vehicles. At most, they can temporarily withdraw a passenger car from traffic for a period of 3 to 12 months and reduce the amount of the OC premium for this period by at least 95%. – advises Grzegorz Demczyszak.

This is all the more important because from January the lack of purchased OC can hit us in the pocket, because the penalties are increasing. They are directly dependent on the statutory minimum wage in the economy, and this will double in 2023 – in January and July – due to very high inflation readings. The minimum salary will be PLN 3,490 and PLN 3,600 respectively.

This means that the fees for not having compulsory vehicle insurance will also increase twice a year – warns Demczyszak. From January 1, the highest penalty for the owners of trucks, tractors and buses without a valid policy for more than 14 days will increase to PLN 10,150 and PLN 10,350, respectively. Passenger car owners will pay PLN 6,770 and PLN 6,900.

So it’s worth setting a reminder to take out mandatory insurance.

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