You’ve probably seen your vehicle rated within a car insurance group. However, what are these car insurance groups, how do their rankings work and how will they affect your premiums?
Car insurance groups work quite simply – the higher the group, the larger the premium you will pay. At the moment there are 20 groups, but this must be expanded to 50 by December 2009. By listing a certain vehicle within a car insurance group, buyers can budget for their long term costs by getting a rough idea of how steep their premiums are likely to be.
The groups themselves are set by the Group Rating Panel, which includes the Association of British Insurers and Lloyds Market Association. The panel meets on a monthly basis to recommend an insurance group for all new passenger cars based on research conducted by the Motor Insurance Repair Research Centre.
So how does the panel determine which cars belong in which groups?
Repair costs are the strongest consideration by the panel because repairs account for more than half of the money paid out on claims. However, there are several other factors to consider too.
For example, the prices of new cars are taken into account as they are often indicative of the cost of a replacement model. The availability of body shells is considered because they are essential for certain accident repairs; and the car’s performance is also deemed an important factor because generally higher performance cars are involved in more costly car insurance claims.
Another factor considered in the car insurance grouping is security – clearly the higher the standard security features on a car, the less likely it is to be stolen.
If your vehicle does not have good security features as standard, the good news is that this is something you can address and potentially earn cheap car insurance as a result. Most car insurance providers will cut your premiums if you add high security door locks, alarms, immobilisers, tracking devices, coded audio equipment and other security features.