Driving prices up

Health Minister Zbigniew Religa has proposed that the costs of hospital treatment for car-accident victims be repaid from the accident insurance (OC) of those who caused the accidents. The Minister estimates that as much as zł.325 million could find its way into the health budget thanks to his proposal.

However, representatives of the insurance industry are unenthusiastic about the Minister's idea. They point out that the 26 companies offering OC insurance earned just zł.70.4 million from the sector.

"We are worried that the introduction of this proposal will lead to an increase in insurance costs," said Marek Molak from the Polish Chamber of Insurance (PIU).

The insurance industry has also opposed a proposal that damages only be paid by the insurance company on the basis of a VAT receipt from a mechanic or garage. Today, one can get the compensation after showing a cost calculation. "This allows the client to have their car fixed in the repair store of their choice, whenever they want and at the cost they want," Molak explains, adding that the existing procedures allow for a quick payment of damages. He claims that the new proposals are damaging to the interests of the insured and will lead to the limiting of the free market of car-repair services. As a result of the proposals, he claims every single scratch will have to be repaired and fixed, which will increase the sum of paid compensation and result in higher insurance costs.

Insurance will not be the only area to see price hikes, claims Molak. "We can expect the position of dealers and authorized services to strengthen, which could result in the rise of prices of spare parts," he says.