The Association of British Insurers, a trade body subscribed
to by all the major UK car insurers, provides with the
help of the Thatcham organisation, a rating group for
every car model produced. Car models are put into one
of twenty groups. This means that each model of car
can be banded with cars of similar characteristics.
There can be a significant spread of groups for a particular
car model range depending upon the factors outlined
below
Each car insurance company will use the rating groups
in calculating the premium for any particular insurance
risk. Over 50% of all money paid out in motor insurance
claims goes on repairing cars. The cost of spare parts
and the times taken by repairers are therefore major
factors in pricing motor insurance.
The factors used by the ABI to calculate group ratings
are:
Damage and Parts Costs - The likely extent of damage
to each car model and the cost of the parts involved
in its repair. The lower these costs, the more likelihood
there is of a lower group rating.
Repair Times - Longer repair times mean higher costs
and the greater likelihood of a higher group rating.
Different paint finishes on modern cars are an important
factor, so these too are taken into account.
New Car Values - The prices of new cars are taken into
account as they are often a good guide to the cost of
replacement and repair.
Body Shells - The availability of body shells (the
basic frame of the car) is taken into account in group
ratings because they are essential for certain accidental
damage repairs.
Performance - Acceleration and top speed are important
factors. Insurers know very well, from their claims
statistics, that high performance cars often result
in more frequent insurance claims.
Car Security - Security features fitted as standard
equipment by motor manufacturers can help to reduce
insurance claims costs. Such features include high security
door locks, alarm/immobilisation systems, glass etching,
coded audio equipment, locking devices for alloy wheels
and visible VIN numbers.
Cars are generally divided into 20 groups mostly determined
by engine size and value, but some insurers add others
for kit-cars or others that have been modified to give
increased performance.
The higher the group number the higher will be the premium
but not all insurers hold the same classifications (e.g.
most insurers may put one type of car into group 5, but
another will put it into 4, and so on).
In practical terms
there are three main groupings for car insurance in terms
of the car size and value:
Small cars – Groups 1 -7 Low risk cars
Medium sized cars - Groups 8 - 13 Medium risk cars
Large Cars – Groups 14 -20 High risk cars
Ratings are generally in line with the purchase price
of the car as that determines the cost of repairs. ‘Difficult
to repair’ imports may attract a higher rating than
a similarly manufactured car from the UK or principal
foreign makers.
Certain Car Insurance companies may consider any car in
group 14 or over as a non-standard risk and may not offer
Internet cover depending upon other factors stated on
the proposal such a driving experience.
