Germany is preparing for significant changes to car insurance in 2025.
The German Insurance Association (GDV) has finalized new type classes that will determine insurance premiums based on vehicle classifications. These changes will affect over twelve million vehicle owners.
Approximately 7.1 million vehicle owners will face higher premiums, while around 5.1 million policyholders will enjoy reduced insurance costs. The remaining 30 million individuals will experience no change in their insurance premiums.
The new type classes are based on factors such as the frequency and cost of claims associated with specific vehicle models. Vehicles with lower type classes will have lower insurance costs, while those with higher type classes will have higher premiums.
The determination of type classes takes into account factors such as the vehicle's value and historical claims data. High-performance luxury vehicles and SUVs typically fall into higher type classes due to their associated repair costs and accident likelihood. On the other hand, older models and smaller cars often have lower classifications, making them more affordable to insure.
The changes in type classes may influence consumer behavior and prompt some drivers to reconsider their vehicle choices. The broader economic context, including pension and tax reforms, may also impact car owners' decisions.
Overall, these changes reflect a dynamic interplay of risk assessment, consumer behavior, and economic factors, with significant consequences for both policyholders and the insurance industry.