Drivers pay hundreds of lei more than last year. How insurers manage to raise rates

Drivers pay hundreds of lei more than last year. How insurers manage to raise rates
Drivers pay hundreds of lei more than last year. How insurers manage to raise rates

Saturday, October 12, 2024, 7:44 p.m

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RCA tariffs, capped only in theory PHOTO Pixabay

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Although RCA rates are supposed to be capped according to legislation passed last spring, many drivers in Romania are seeing significant increases in insurance costs. In the Capital, for example, a driver who last year paid 1,500 lei for RCA, now has to take out of his pocket about 2,000 lei for the same policy. The differences are considerable, even 500 lei, despite the existence of this ceiling.

How do insurers manage to raise rates?

Authorities explain that although rates are capped, insurance companies have found ways to raise prices. In the past, many companies offered various discounts that, over time, were eliminated, which led to an increase in the cost of RCA policies. In addition, the RCA cap allows insurers to adjust rates based on the rate of inflation, which added 6.8 percent to rates from February 2023, writes Observer News.

Also, the premiums that insurance companies pay have increased, giving them the justification they need to raise prices. Even though the cap is theoretically in place until the end of 2024, drivers are already feeling the effects of higher rates without the measure giving them the financial protection they expected.

With the current cap law in place until the end of this year, it remains to be seen what will happen in 2025. It is possible that once this measure expires, RCA rates will continue to rise, especially in the current inflationary economic environment and increasing operating costs for insurance companies.

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