What Are Car Insurance Groups?

There are factors beyond your driving experience, address and job that affect the price you pay for car insurance.

One of those factors is the insurance group that your vehicle belongs to. Here’s everything you need to know about car insurance groups and how they work.

Premium calculations

The price you pay for motor cover reflects how much risk your insurer believes you pose. The higher your risk, the more likely it is you’ll make a claim and cost them money. Higher risk policyholders therefore, quite logically, pay more for cover than lower risk policyholders.

Insurers use information about you and your vehicle to assess your risk. For example, people with less experience on the roads are statistically more likely to be involved in collisions and to file claims. Similarly, policyholders in certain parts of the country are more likely to have their vehicles vandalised or stolen.

While these factors about you and your personal circumstances form a large part of your risk profile, your vehicle matters too. Its power, value and security dictate how likely it is to be involved in an accident or stolen.

Rather than creating a risk profile for every individual make and model, insurers assign cars to a group of vehicles with a similar risk profile, and your insurer factors this ‘group’ rating into their quote.

How do car insurance groups work?

Every car in the UK falls into one of 50 car insurance groups. Cars in group 1, such as the Volkswagen Up, are the cheapest to insure. Cover gets more expensive as you move up through the groups. Those in group 50, such as the current Range Rover, are the most expensive to insure.

A vehicle’s grouping is determined by a panel that includes the Association of British Insurers (ABI), Thatcham Research and the Lloyd’s of London Market Association. They assess the vehicle across a range of eight categories to determine its grouping:

• Damage and parts costs
• Repair costs and times
• New car values
• Parts prices
• Car performance
• Safety
• Bumper compatibility
• Car security

These address the following points:

• Performance – the vehicle’s top speed and rate of acceleration determine how fast it can go and how quickly it can go from standing or low speed to high speed. Vehicles with higher top speeds and faster acceleration tend to be placed in higher car insurance groups than those with lower top speeds and slower acceleration.
• Safety – the vehicle’s safety features, such as Autonomous Emergency Braking (AEB) and collision warning technology, reduce the likelihood of it being involved in an accident. Those with the most and latest safety features tend to be grouped lower than those lacking in safety features. Also, the structure and placement of your vehicle’s front and rear bumpers will determine how it fares in a collision, and has an effect on its grouping.
• Value – the higher a vehicle’s value, the more an insurer potentially must pay out in the event of a total write-off. New cars and higher value cars can make your insurance more expensive as their value partly determines their grouping.
• Security – vehicles with advanced security features are more difficult to steal and are therefore less likely to be the subject of an insurance claim. For this reason, better security features push a vehicle further down the 50 insurance groups and result in cheaper cover.
• Parts and repairs – vehicles with parts that are expensive to repair or replace, or those that tend to take more man-hours to repair, are most likely found in the higher groups because they increase the cost of a potential pay-out. By contrast, those with cheap parts and short repair times benefit from cheaper insurance.

Can I change my car insurance group?

Though you can make your vehicle more secure and more powerful, doing so won’t change its insurance grouping.

However, these kinds of modifications should be disclosed to your insurer and could have an effect on your premiums – good or bad.

Making your vehicle more secure with a Thatcham-approved security device, for example, could save you some money on your insurance. Increasing your car’s top speed, however, could have the opposite effect.

The main use of insurance groupings is for when you are considering a car purchase – the dealer or manufacturer’s product information will specify. Once you know the group, you can get a sense of how much your insurance premium is going to be affected by your decision.

Clearly, aiming for a car in a low group will help out if you as a driver are deemed to be a high risk insurance proposition, as the perceived low risk attached to the car won’t bump up your premiums further.

And if you see that your preferred car is up there in the 30s and 40s, at least you know what to expect when you run a quotation.