Car insurance groups play a big part in determining your premium. Do you know your car's group?
When you insure your car, its car insurance group can be a determining factor in calculating the premium. There are 50 insurance groups, and generally, the lower the group, the cheaper your premiums are likely to be.
So if you’re hoping to reduce your premiums, then ‘downgrading’ to a car in a lower group isn’t a bad idea.
The groups give an indication of risk to insurance companies, with 50 being highest and one being lowest.
High performance cars will typically occupy the higher slots, and are likely to incur the largest costs for insurers in terms of claim payouts.
Who decides a car insurance group?
Each new passenger car built to UK specifications is classified by the Group Rating Panel, which meets on a monthly basis.
This panel comprises members from the Association of British Insurers (ABI) and Lloyds Market Association (LMA).
Around 70% of its data is supplied by a group called Thatcham, which does a lot of research into the efficient, safe and cost-effective repair of vehicles.
The proposed groupings are recommendations only, and hence are not binding on insurers, who can set their own groupings if they choose.
However, variations between insurance companies are unlikely to differ vastly.
Previously there were 20 groups. However, Thatcham introduced the 1-50 system in 2007. This means that each model of car tested can be banded more accurately with similar cars.
How are the insurance groups allocated?
Over 50% of the money paid out in car insurance claims goes towards the cost of repairs, according to figures from the ABI. But this isn't the only factor that's considered when groups are allocated.
The principal factors considered to group cars are as follows:
Cost of damage to parts
This is an assessment of the extent of damage that a car model might incur, and the cost of the parts involved in its repair are factored in.
Essentially, the cheaper it is to replace or repair these parts, the lower the grouping is likely to be.
Body shell availability
Group ratings can be affected by the availability of body shells in addition to parts, because they may well be required in the repair of damage to a car.
Average repair time
This is essentially the labour cost - the longer it takes to fix, the more it’ll cost – which is likely to get the car a higher grouping.
Factors such as achieving the right paint finish on modern cars will be taken into consideration.
Value of new cars
The cost of new cars are usually an indication of the cost of replacement and repair, so that's also taken into account.
High performance cars have a tendency to bring about more frequent insurance claims. So if the car’s a bit handy when it comes to top speed and acceleration, then it’ll probably get a higher group rating.
Level of security
The more secure the car, the more likely it is to achieve a lower grouping, as it's less likely to be stolen.
Features taken into consideration include alarms and immobilisers, security locks on doors, visible Vehicle Identification Numbers (VIN) and locking devices for ‘pinchables’ such as alloy wheels.
So what's my car's insurance group?
You can find this out by visiting the Thatcham website. You'll need to register though.
Don't forget that different insurance companies may group cars slightly differently. But this should still be a pretty accurate indication of how much of how risky insurers consider your car.