Car insurance groups explained

What are car insurance groups?

Naturally, the car you drive has a big influence on how much you pay for car insurance. Insurers use a 50 group system to calculate how much of a risk your car is likely to be, with lower car insurance groups seen as being less of a risk and higher groups featuring high performance, more expensive cars as more risk.

The Group Panel Rating, which was created by the Thatcham Research team for the ABI (Association of British Insurers), ensures that drivers with less powerful, safer vehicles pay less for their car insurance than those who drive more modified vehicles with larger engines.

The group rating system along with a number of other factors including your age, your address and even your job help insurers get a better idea of the sort of risks you’re likely to face and therefore how much it will cost you to get car insurance.

What factors affect what group your car is in?

There are a number of factors that the research team consider when deciding which one of the 50 groups a vehicle should be placed in. Many people believe that the engine size is the biggest factor when grouping vehicles for insurance but this is just one of many features that are considered. Some of the others include:

Repair times: With the majority of costs paid out by insurers coming from repairing cars, the time and therefore cost of repairing your vehicle will have an impact on which insurance group it’s in. The more expensive repairs are and the price of replacement parts, the higher the group your car will be in.

Car value: If the worst should happen then your insurer may have to pay to replace your entire vehicle. Understandably insurance companies will want to get the possible value for their money so therefore if your car is expensive to replace, you can expect to pay more for your car insurance.

Performance: There is a collective assumption based on years of experience in the insurance industry that high-performance vehicles are more likely to be the subject of a claim. This means that cars built specifically for speed are going to get a higher group rating. Slower vehicles with a lower top speed, on the other hand, will be in a lower group.

Safety and security: Modern cars are getting safer and safer every year and therefore you’ll find that cars with higher Euro NCAP ratings will be in the lower insurance groups. As well as the safety of the car, the security of it is also a factor insurer’s look closely at. The more security features your car comes with, the less likely it is to be stolen and therefore the less risk it will be to your insurance company.

How can I reduce the cost if my car is in a high group?

While insurance companies are not legally obligated to use these groups, these groups just reaffirm what the insurers already know, that a high-risk vehicle is a high-risk vehicle.

Unfortunately, if you find that your vehicle is in a high insurance group, it’s unlikely that your insurance premium is going to be the cheapest but there are ways you can reduce the cost of your cover:

• Ensure that you have the highest possible level of security for your vehicle. Install alarms and immobilisers if they are not already installed and try to park in a locked garage overnight.
• Avoid all non-essential modifications unless you’re willing to pay for specialist high-performance and modified car insurance.
• Increasing your voluntary excess will reduce the overall cost of your insurance premium but remember this is the amount you agree to pay if you make a claim.
• Only pay for the insurance you need with temporary car insurance. If you’re just borrowing a car for a few days or weeks, don’t pay out for an expensive annual policy when you can get short term cover that’s flexible and offers great value for money.

What group is my car in?

While some car insurance companies will have their own grouping system, it’s unlikely that they will be too different from the one created by the Thatcham Research. You can find out which group your car is in by visiting their website.