Insurance Statement from the President of the Insurance Association: There is a decrease, not an increase
Atilla Benli, President of the Turkish Insurance Association (TBS), said that the increase in auto insurance prices was limited compared to the increase in vehicle prices.
Benli assessed criticism of the sharp increase in car insurance costs with a written statement.
Benli argued that the insurance companies did not increase, that the increase in vehicle prices, the costs of replacement vehicles and tow trucks were reflected in the premiums.
Benli said: “Inflationary effects pushed up vehicle prices and therefore auto insurance premiums. So there is a misdirection of the public. Looking at the insurance company price multipliers, there is a decrease, not an increase,” he said.
‘REDUCED INSURANCE PRICES’
“There is a situation contrary to what is claimed in auto insurance,” said Benli, “There is a decrease in insurance prices. In the first quarter of 2019, the average price of vehicles for private use, which was at the level of 106 thousand liras, increased to an average of 490 thousand liras in the third quarter of 2022. On the other hand, the average premium charged by insurance companies for car insurance increased from 1,500 lira to 6,000 lira,” he said.
“This means that there was a decrease in the price of insurance in the said period,” Benli said, continuing:
“When we look at the general level of average prices for auto insurance, a similar picture emerges. Whereas the median price for auto insurance was around 14 per thousand in Q1 2019, it was around 12 per thousand in Q3 2022, when prices rose the most.
In addition, we offer annual price and premium guarantee in Turkish lira on our policies. In the current economic conditions, there is no other sector that can promise a one-year price and guarantee that the value of the asset is maintained without reflecting cost increases for its clients”.
ATTENTION TO THE INCREASE IN VEHICLE PRICES
“In vehicle prices, 120 percent in the last year; In the last two years, there has been a 360 percent increase,” Benli said, adding:
“This increase in the fair value of the vehicle implies an increase in the value of the insured property. Auto insurance premiums also increased based on vehicle prices.
When the damage occurs, the amount to be paid by the insurance company is assessed on the current value of the vehicle on the date of the damage, not the value of the vehicle on the date of issuance of the policy. insurance price; It represents the multiplier consisting of general expenses, brokerage commission and other expenses added to the risk premium that insurance companies must receive according to their rates.”
PRICES ARE DETERMINED ACCORDING TO THE BALANCE OF THE DAMAGE PREMIUM
Noting that companies make auto insurance templates and set prices according to the amount of damage, Benli said, “Therefore, they offer their prices in this branch to consumers, according to the premium balance of loss, within the free rate conditions”.
Benli said: “Here, we see that the source of the increase in the premium amount is the premium amounts determined according to the fair value of the vehicles, rather than the increase in risk premiums included in the amount of the premium. business insurance premium. In other words, there is a misdirection of the public, ”he said.
Benli said: “Insuring against risks is our greatest guarantee” and continued as follows:
“We must not forget that, with great difficulty, we can insure our assets and, in case of loss, we can replace them with insurance and continue our lives from where we left off. Insurance is an important indicator of development and is of vital importance in strengthening the economy of our country”. (PHOENIX)