Insurers have taken steps to keep home insurance premiums low in Hungary
The National Economy Ministry welcomed insurers’ voluntary decisions to comply with a request from the government to mitigate “unjustified” home policy premium increases in a statement issued on Monday.
In the case of home insurance premiums, insurers were expected to raise their rates significantly, which would have placed a considerable additional burden on Hungarian families. The government is opposed to any unjustified price increases, so, with the financial security of families in mind, the Ministry of National Economy immediately initiated consultations with the insurance sector. The ministry asked insurance companies to follow the example of the banking sector and telecommunications service providers and voluntarily agree to price caps and premium reductions, ministry said.
If the negotiations had not been successful, the government was prepared to intervene in home insurance pricing through regulatory measures.
In recent days, insurance companies have announced voluntary price caps one after another. The government welcomes the fact that insurers have accepted the government’s objective and are taking action against unjustified price increases in the interests of families. Like banks, the Hungarian insurance sector is on a stable footing, which allows for a reduction in home insurance premiums, while insurance amounts will continue to follow the increase in property values in order to avoid underinsurance. As a result, despite the reduction in premiums, there will be no deterioration in the quality of services provided.
According to their announcements, insurers have voluntarily undertaken that the premium levels for new home insurance contracts concluded by the general public will not exceed the premium levels applicable on December 31, 2024, under unchanged conditions, and they will maintain this commitment until June 30, 2026. In addition, all customers with existing contracts will benefit from a discount during the one-year period between July 1, 2025, and
June 30, 2026.
The government’s decisive action will provide tangible assistance to more than 3 million Hungarian families, totaling approximately HUF 15-25 billion. As a result of the voluntary commitments made by insurance companies, home insurance customers will be exempt from the effects of 12 months of inflation on their insurance premiums, while the value of their insured home assets will increase, thus preventing underinsurance.
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