At the end of the year many insured persons receive letters from their insurer about premium adjustments. This often creates uncertainty. In the current issue of its “Let’s talk about money” information series, the Austrian Financial Market Authority (FMA) informs consumers about when such increases in premiums are permissible, and what rights insured persons have.
Premium adjustments are contractually defined
Almost all insurance companies change premiums. Such changes are determined in the insurance policy or the General Terms and Conditions of Insurance. Their purpose is to ensure that insurance cover retains its value over many years. Frequently adjustments occur based on price indices, such as those published by Statistics Austria, or based on an agreed fixed percentage.
Premium increases cannot be made arbitrarily, but must be based on a clearly agreed premium adjustment clause that is clear and comprehensible to policyholders. Special legally enshrined rules apply for health insurance.
Higher premiums may also be advantageous
There are also advantages for insured persons of premium adjustments: the agreed level of insurance cover remains in place, and there is no risk of a underinsurance creeping in, where the sum insured loses value. At the same time such adjustments also ensure the long-term viability of insurance undertakings.
What insurance policyholders can do if premiums are high
Several options exist for policyholders if the premium is too high: Depending on the contract, you can object, the tariff can be adapted or insurance coverage can be temporarily suspended. Prematurely changing insurance provider should be considered carefully, as there might be disadvantages such as increased premiums, the need to undergo a fresh medical or provisions for ageing being lost.
The FMA advises not to rashly see adjustments to premiums as detrimental, but instead to inform yourself, to check contracts, and to compare offers. If you understand why and when premiums increase, you can make a well-informed decision, while also permanently remaining adequately insured.
The current edition of “Let’s talk about money” can be found in English, along with all past editions on the website https://redenwiruebergeld.fma.gv.at/en. Follow “Reden wir über Geld” on Instagram too at @redenwiruebergeld.
Journalists may address further enquiries to:
Boris Gröndahl (Media Spokesperson)
Telephone: +43/(1)249/59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]