​If you’re one of the nearly 1.7 million drivers with RCA insurance from bankrupt insurer Euroins, you’ll have learned that the government on Thursday decided to extend the validity of those policies by three months until December 8. You won’t have to pay more for a new policy or wait for money from the FGA as you would if you canceled your current policy, but remember one important thing: the RCA price caps expire on October 10 and broker prices are expected to increase.

All Euroins insurance, not just RCA, expires on December 8, 2023

Prime Minister Marcel Čolaku announced on Thursday that the reason for the three-month extension of insurance policies issued by Euroins is that the 1.8 million existing RCA policies would have automatically expired on 8 September. Such a large number of cars without RCA would indeed be a huge hazard on the roads.

On the other hand, the figure given by Cholaku, namely 1.8 million RCA policies active in Euroins, is wrong.

As written in the GEO project, adopted by the government on Thursday, the number of RCA insurances issued by Euroins that are still active is approximately 1.7 million policies.

But Euroins didn’t just sell RCA. There are also home insurance, malpractice or warranties. All of these contracts now expire on December 8, 2023.

The act adopted by the Government on Thursday will enter into force as soon as it is published in the Official Gazette.

Why extending Euroins insurance is a back-and-forth: the RCA price cap ends on October 10

Of course, for everyone who has RCA insurance with Euroins, the news about the extension of the policies is good news.

If they had to cancel the policy they would have to wait possibly over 2 months for FGA to refund the rest of the premium and they would have to take out another RCA insurance which would certainly be more expensive.

However, insurance brokers consulted by HotNews.ro pay attention to a less mentioned aspect: on October 10, 2023, the 6-month price cap ends, and if the government does not extend this period, it will enter the free price zone. .

With no cap, RCA prices may rise again after October 10

Given that current prices have been capped at what insurers charged on February 28, 2023, many brokers expect prices to rise again after October 10.

Insurance brokers and executives explained to HotNews.ro on the condition of anonymity that they expect price changes after the restriction period.

• “RCA’s October 28 price freeze has not caught all insurers in the wrong place. Some of them used lower prices than those reported to ASF, and then they had a margin between 20 lei, 50 lei and even 100 lei to raise or lower prices.
• What will happen after October 10? True, the rate of insurance contributions to FGA has increased, but they will return this money. The level of damage has stabilized, the frequency of damage has decreased.
• Normally there would be little reason for price increases, but history shows that such increases do occur. Let’s not forget that new RCA reference rates will be published. If they are higher, this may be used by insurers as an excuse to increase the applicable RCA rates.” This was reported by an insurance broker to HotNews.ro.
  

The head of insurance confirmed to HotNews.ro that there was a margin after the RCA price cap, which even allowed for the tariffs to be raised to the cap on February 28, 2023.

• “The RCA market hasn’t stabilized yet, but I don’t think everyone will raise prices. RCA prices are quite high now.
• It is true that the coverage offered by the RCA policy 5-6 years ago is completely different from what it is now – now you can trade in your car, liability limits are higher, you can repair your car at any service, apply any what speed
• However, I don’t think they can increase RCA prices more compared to the purchasing power in Romania.” said an insurance executive who spoke on condition of anonymity.

What is the possibility for RCA Euroins policyholders to have price restrictions even after October 10

• “The big pain is that on October 10, 6 months of RCA rate caps will end. From there, the prices will be increased – “God have mercy”.
• We had 771 RCA policies in force at the date of de-licensing of Euroins, of which 643 were due to expire after 8 September 2023. Thus, only 128 policies expired on time. I currently have 364 RCA Euroins policies in force. Including today, I have canceled 10 policies.
• RCA policy extensions from Euroins are two-way. I told those who are happy that the expiration date is being extended that it can be bittersweet.
• They’re happy that they won’t have to wait to get any pennies they’ll eventually get, but instead, after October 10th, they could end up paying a lot more for a premium policy than they could now, money they’ll never have. come back.”, Florin Talosh, director of the Safety Broker de Asigurare (franchise) agency, told HotNews.ro.

He recalled the fact that the ASF recently changed RCA legislation through a rule that stipulates that RCA policies will be able to take effect a maximum of 60 days after they are purchased, compared to 30 days as previously.

• “If they want to stay on the capped rates, Euroins customers can virtually take out new insurance policies valid from December 9 to October 10,” Florin Talos explained to HotNews.ro.

And drivers who have RCA with other insurance companies can take out other RCA policies at limited prices until October 10

This option is also available to drivers who are RCA insured with other insurance companies and want their future RCA policy at capped prices now.

So if a driver insured with Grawe, for example, has an RCA policy that expires on October 15th, they can take out another RCA policy at capped prices, but which will take effect from October 15th, 2023 to October 10th.

• Carefully! No one knows for sure whether prices will rise after the end of the RCA price cap period, nor whether the government will extend the cap beyond October 10, 2023.

COTAR, a confederation of carriers whose members include insurance brokers, also warned the danger of RCA price increases after 10 October 2023 and the risks to Euroins policyholders who have renewed RCA policies.

The confederation warned that extending the Euroins policies would cause further damage and result in €90 million in additional compensation to the Policyholders’ Guarantee Fund (FGA), which pays out damages caused by at-fault accidents with Euroins’ RCA insurance.

And the Economic and Social Council (CES) warned in an opinion issued on the OUG, which extended the RCA Euroins policy, that the measure would put serious pressure on the FGA.

The RCA price limit can be extended until January 2024. What are the reasons – sources

On the other hand, there are indications that the authorities are considering extending the RCA price cap beyond October 10, in which case drivers with Euroins car insurance will have even more time to renew their RCA insurance.

As well as extending the validity of Euroins insurance, the Financial Supervisory Authority (ASF) wants to propose to the Government to extend the RCA price cap for a further 3 months, until 10 January 2024.

The reason, multiple government and insurance industry sources told HotNews.ro on Tuesday, was that all policies of RCA Euroins, the bankrupt insurer, had lapsed.

• Read more: EXCLUSIVE RCA price cap can be extended until January 2024. What are the reasons – sources