Hull insurance rates continue to climb as market pressures mount
Insurers interviewed by the Prime agency report that hull insurance premiums have risen by roughly 15% to 20% at the start of the month. The surge reflects broader shifts in vehicle values and market dynamics that affect premium calculations in Canada and the United States.
The rise in comprehensive coverage costs is tied to several factors. Higher car prices push up the amount insured, directly impacting policy cost. In addition, inflation trends, exchange rates affecting spare parts pricing, the base rate for standard hours, the profitability of drivers, and the vehicle’s region of registration all influence premium levels. For drivers reaching break-even points, the changes are increasingly subtle, according to insurers.
Market commentary indicates that the 15% increase in hull policy prices signals only the start of a broader price adjustment. Spare parts costs are expected to continue rising, and insurers state a commitment to meeting policyholder obligations despite the higher prices.
Efforts are underway to introduce alternative high-quality spare parts. Dealers are preparing for a shift toward these parts, which are often manufactured in the same plants as original equipment or sourced from reputable suppliers. The focus is increasingly on Asian supply chains as demand for affordable, reliable components grows.
Concurrently, shortages heighten the risk of vehicle theft linked to spare parts dismantling. Insurers note that popular budget models are especially vulnerable to such theft, underscoring the need for vigilant risk management and improved security measures.
Industry observers suggest that policyholders should expect ongoing adjustments as the market searches for balanced solutions between cost containment and reliable coverage. The trend points to a broader recalibration of pricing, supply chains, and risk controls that will shape hull insurance for the foreseeable future. [Source: Insurer reports and market briefings].