Between 2010 and 2016, the number of disputes related to car insurance increased compared to the number of accidents. This also caused an increase in premiums by insurance policy number paid by policyholders.
Litigation in the auto insurance sector is growing. More and more often we end up in court and this also affects the costs of the RCA, also due to the long duration of the trials.
Car insurance: growing disputes and lengthy processes
In April 2021, IVASS issued a statistical bulletin regarding the insurance dispute in the motor and boat liability sector, referring to the period between 2010 and 2016.
The data takes into account the information shared with IVASS by Italian and foreign insurance companies operating. The IVASS document shows how the litigation of the policyholders increased during the period considered.
Although the number of disputes decreased in absolute values from 2010 to 2016, the number of cases increased about the number of claims. The most frequent reasons for which a judge is used are:
- settlement of claims;
- quantification of the damage;
- attribution of responsibility for the accident;
- refusal by the insurance company of the request for access to the deeds of the accident.
Insurance reserves and costs for policyholders are increasing
To meet the costs of the processes, insurance companies set aside a part of the premiums in special funds. In the period considered by IVASS, the total provisions amounted to € 6.8 billion. Of these, 35% relate to the motor and boat TPL class.
On average, companies set aside € 25,000 for first-degree cases and € 45,000 for second-and third-degree cases. The average provision has grown in recent years and, as IVASS also states, this affects the pricing process. In a nutshell, insurance premiums have risen since 2010 partly due to the increase in costs associated with pending court cases.
Again according to IVASS, there are two problems on which to intervene: on the one hand, the increase in disputes which damages the policyholders and those who have suffered damages and, on the other hand, the excessive duration of the processes which increases the car insurance costs and causes inconvenience to those who have suffered damage due to an accident.