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Understanding Car insurance groups

When you apply for car insurance, the insurance company will want to assess the risk of any claims that may occur, and the potential cost of those claims, before they issue a quote for a policy. In order to facilitate this, all UK insurers refer to a set of car insurance groups, sometimes called car insurance bands.

What are car insurance groups?

Car insurance groups were introduced over forty years ago as a way of identifying which cars were more likely to be involved in a claim, and which would cost the most to repair when a claim occurred. In 2007, the number of car insurance groups was increased from 20 to 50. Currently, cars from earlier than 1975 are not officially in the car insurance groups system, and their premiums are based on the historic data of the insurers.

What factors affect insurance groups?

Car insurance groups are based on a number of factors, including the cost price of the car when new, kerb weight, performance and the estimated cost of the most common crash repairs. A high performance, high specification vehicle is more likely to attract a high vehicle group, compare this to a small city commuting vehicle where it is more likely to have a lower group rating.

So, the low powered Chevrolet Spark 1.0 Litre or Vauxhall Corsa Ecoflex 1.0 Litre, may both be in car insurance group 1, while the immensely powerful Jaguar XKR 5.0 Litre Coupe or Audi A8 Quattro 6.0 Litre, will top the table in group 50. As you would expect, medium priced, medium power family saloons will sit somewhere around the middle of the car insurance groups.

Other factors that affect car insurance groups include:

How are car insurance groups calculated?

Car insurance groups for all new cars in the UK are calculated by the Group Ratings Panel. The panel meets each month to consider all the new models introduced. These considerations use research from Thatcham (the motor insurance repair research centre). Thatcham conduct a set of standard tests to simulate a typical car accident and then assess the likely car accident repairs that make up more than half of the total paid out in accident claims. These tests include:

This data is combined with the other factors to produce a risk rating for the insurers and place the cars into car insurance groups.

The higher your car insurance group, the more expensive your car insurance premium may be.

How can you reduce the cost of car insurance?

The car insurance group range for any given make or model can be wide. It can be worth checking what compromises you could make to reduce the car insurance groups for the vehicle you want to buy and so possibly reduce your car insurance premiums.

For example, a Ford Focus LX1.4 is in group 6 of the car insurance groups, while the Ford Focus LX 1.8 rises to 15. The top of the range Ford Focus ST500, with its 2.5 litre high performance engine, rises to a heady 36. You need to ask yourself whether it is worth paying extra every month on your insurance for a small increase in power – especially if the 1.4 version delivers ample power for your everyday needs.

Of course, car insurance groups are only part of the calculation when it comes to the overall cost of your premium. You can also cut the cost of car insurance by building a no claims discount, restricting use by younger drivers and upgrading the standard security features.

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One Quote Direct Insurance Services Limited trading as Octagon Insurance Services is an appointed representative of Europa Group Limited and acts as a credit broker and not a lender in relation to premium finance contracts. Registered as a limited company in England and Wales No. 5479983. Europa Group Limited is authorised and regulated by the Financial Conduct Authority, Financial Services Register No. 309794. Registered office: Europa House, Midland Way, Thornbury, Bristol, BS35 2JX.

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