In the realm of motor insurance, understanding the nitty-gritty of how car insurance groups work is essential. It is a fundamental component in determining the cost of your insurance premium.
Car insurance groups use a lettering system to indicate the level of safety provided by a car. But how exactly do these groups function? Let’s delve into the specifics.
What are car insurance groups?
Car insurance groups are a significant factor in determining the cost of your car insurance policy. Every vehicle available in the market is assigned a specific insurance group ranging between 1 to 50, with group 1 consisting of the cheapest cars to insure and group 50 being the most expensive.
The categorisation is primarily based on a system developed by the Association of British Insurers (ABI) and Lloyds Market Association, with the assistance of Thatcham Research.
The role of ABI group rating system
The ABI Group Rating System plays a crucial role in determining how car insurance groups work. The system is designed to provide insurance providers with the necessary information to calculate premiums for different car models accurately.
Several factors come into play in this system. These include:
- The vehicle’s value
- The cost of replacement parts
- The time taken for repairs
- The vehicle’s performance
- The safety features of the car
- The car’s security
Understanding the letters in car insurance groups
In addition to the numbering system, car insurance groups also incorporate a lettering system, which is used to denote the level of safety provided by the car. The following are the interpretations for each letter:
- A: The car meets the standard requirements for its group.
- D: The car does not meet the standard requirements for its group and is therefore placed in a higher insurance group.
- E: The car exceeds the standard requirements for its group and is consequently placed in a lower insurance group.
- P: The car’s data is provisional as the rating system was incomplete at the time of its launch.
- U: The car’s security level is below the required standard. While it can still be insured, the insurer might require additional security features to be installed.
- G: The car is imported. Imported vehicles are categorised into two groups – parallel imports and grey imports.
How vehicles are grouped for insurance
While understanding how car insurance groups work, it’s imperative to know the factors that influence the grouping of vehicles for insurance. The following are the primary considerations:
- Vehicle valuation: The car’s price and the cost of settlement in case of a total write-off are taken into account. The type of the car also influences its grouping. For instance, high performance cars of a certain value are likely to be placed in a higher insurance group compared to an estate car of the same value due to the assumed driving behaviour.
- Cost of repair: A globally recognised standard crash impact test is used to assess the repair times and cost of a vehicle. The results are recorded and used to estimate accident damages, repair times, and part costs for insurance purposes.
- Vehicle performance: The performance of the car is assessed by measuring its acceleration from 0 to 60 mph and its top speed. More powerful vehicles are placed in higher insurance groups.
- Safety features: Cars equipped with the latest safety technologies such as autonomous emergency braking are less likely to be involved in an accident, and therefore, are often placed in lower insurance groups.
- Cost of spare parts: The cost and availability of 23 common vehicle parts are used to compare the car with similar models from other manufacturers. Cars that are cheaper and quicker to repair are placed in lower insurance bands.
- Vehicle security: Vehicles with higher security features are harder to steal or break into, thus placing them in lower insurance groups.
- Bumper compatibility: Cars with bumpers compatible with the criteria of the ABI’s Group Rating System are categorised into lower insurance groups.
Popular insurance groups
To provide a clearer understanding of how car insurance groups work, let’s explore some of the most common insurance groups:
- Insurance group 1-10: This group features cars with the lowest insurance costs. These vehicles usually have more safety features, making insurance costs more affordable. Typical cars in this group include the Toyota Aygo, Vauxhall Corsa, and Fiat 500.
- Insurance group 10-20: This group consists of vehicles with reasonable but slightly higher costs. Common cars in this group include the Mazda 2, Renault Clio, and Ford Fiesta.
- Insurance group 20-30: This is a mid-range insurance group. Cars in this group are slightly more costly to insure but offer a balance between performance and practicality. Examples include the Suzuki Swift and Ford Kuga.
- Insurance group 30-40: This group is dominated by performance-oriented vehicles and more expensive cars. Examples include the BMW 3-Series and Audi A5.
- Insurance group 40-50: The highest insurance group consists of powerful and prestigious vehicles, including luxury vehicles and top-spec SUVs. Examples include the Jaguar XF, BMW 5-Series, and Audi TT.
How to lower your car insurance
Understanding how does car insurance groups work is just one part of the puzzle. Here are some tips to help you lower your car insurance premiums:
- Voluntary excess: Increase your voluntary excess to reduce your annual premium.
- No claims bonus: The longer you go without making a claim, the lower your premium will be.
- Drive less: Reducing your annual mileage can lower your car insurance costs.
- Pay annually: Paying your premium annually instead of monthly can save you money as insurance providers often charge interest on monthly payments.
- Car storage: Storing your car in a secure location like a garage can help lower your premiums.
In conclusion, understanding how car insurance groups work can help you make informed decisions about the type of vehicle you choose to buy or lease, thereby potentially saving you money on your car insurance premiums.
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Frequently asked questions
What insurance group is my car?
The insurance group of your car is determined by various factors, including the type of car, your age, address, occupation, driving experience, and driving history.
How do I check my car insurance group?
Most car dealerships and manufacturers will list the insurance group of each car model on their websites. Alternatively, you can use online tools or contact your insurance provider for this information.
What is the price difference between car insurance groups?
Determining the exact cost between various car insurance groups is not a straightforward task. It relies on an array of elements, including but not limited to, your address, age, experience and past driving record.
What insurance group are electric cars in?
The classification of what insurance group electric cars fall into can vary greatly, depending on several factors. These include the type of electric car, its value, safety features, and repair costs. Generally, electric cars tend to fall into higher insurance groups because they are often more expensive to buy new than their petrol or diesel counterparts.
Other factors such as the cost of repairs for electric vehicles can be higher due to the specialised parts and expertise required. However, as the market for electric cars expands and the technology becomes more commonplace, we may start to see a shift in their car insurance group classification.