Car insurance groups can be a confusing territory for many vehicle owners who do not understand what they mean, how they apply, and what they influence in terms of insurance premiums. Many drivers may have heard about them but do not understand how they are calculated or how they impact the cost of their cover. In this article, we shall explore the meaning of car insurance groups and how they affect the premiums you pay for insurance coverage.
What are Car Insurance Groups?
First introduced in the UK, car insurance groups are a classification method created to assess cars’ insurance risk probabilities. They categorize cars into groups based on their characteristics and risks. The classification scheme is a system of grouping vehicles into 50 numbered groups, with the Group 1 cars considered the lowest risks in terms of insurance, while Group 50 cars are the highest risks.
The criteria used to assign cars to a group focus on the following key factors:
• The car’s value and the cost of repair
• The model and brand of the car and their availability of parts
• The engine size and performance capabilities
• The performance test results
• The estimated time for repair
• The price of spare parts and accessories
• The cost of labor fees
What are the Advantages of Car Insurance Groups?
The primary benefit of car insurance groups is that they help insurers to price car insurance policies appropriately. By categorizing cars based on their probability of risks, it is easier for insurers to estimate the cost of providing insurance coverage for different car models. Thus, the classification helps drivers get an accurate premium quotation for their chosen car model.
Additionally, car insurance groups’ stability is another essential advantage. Once a car is assigned to a group, the classification only changes if there is a significant alteration or development to that car model. This provides consistency and reliability for insurers to calculate premiums consistently.
What are the Impacts of Car Insurance Groups on Car Owners’ Premiums?
The impact of car insurance groups on the premiums you pay for your insurance coverage is significant. Most insurers use car insurance groups to determine the cost of insurance premiums for car owners. The higher the car insurance group assigned to a vehicle, the higher the risk associated with the vehicle, and the higher the insurance cost.
For instance, a car in Group 1 is likely to pay lower insurance premiums than a vehicle in Group 50. Cars in Group 1 are generally cheaper, less powerful, and have lower risk probabilities than cars in Group 50. Cars in Group 50, on the other hand, feature expensive parts, high-performance capabilities, and high risk probabilities that make them costly to insure.
Facts and Statistics
The following are statistics and facts regarding car insurance groups in the UK:
• The Group 1 category includes small engine vehicles that are relatively inexpensive to repair
• The Group 50 category includes high-performance vehicles with powerful engines and high repair and replacement costs
• The most popular car models in the UK mostly belong to groups 10-30
• Insurers frequently use car insurance groups to determine the premiums of up to 80% of policies in the UK
• The average cost of car insurance in the UK is £460 annually
• Car owners tend to pay more for cars with higher repair and replacement costs and greater performance capability
How to Find a Car Insurance Group Information
To know your car’s assigned insurance group, you can visit the official website of Thatcham Research – a UK based independent agency that helps insurers calculate risk values. On the website, you can search for your car’s manufacturer, model, and year to view its assigned group number.
Alternatively, you can also check with your insurer to know your car’s assigned group number. Insurance companies keep records of all their vehicle classifications, and if you provide them with your registration number, they will have the information on their system.
Additionally, it’s essential to note that while car manufacturers might advertise that their car models are in a specific group, the assigned car insurance group can differ from one insurer to another. The assigned groups indicate a vehicle’s risk bracket based on its characteristics, and insurers use additional variables to determine the precise premiums charged for a particular car model.
Ways of Reducing Car Insurance Premiums
Being in a high-risk car insurance group can result in high insurance premiums, and the following are ways drivers can reduce their car insurance premiums.
• Choosing a car in a lower group can significantly reduce your insurance costs. You may want to trade-in your higher risk car for a lesser risk vehicle.
• Maintain a good driving record by avoiding traffic offenses, accidents or claims, and you will qualify for low-risk status and lower premiums rates.
• Installing an approved security system, like an alarm or anti-theft device, can help reduce premiums by reducing the risk of theft to the insurer.
• If you drive less frequently, consider getting a black box in your vehicle. It monitors your driving behavior and can offer you lower premiums if your driving is safer.
How to Use Car Insurance Groups to Choose a Car
One of the best approaches for drivers seeking affordable car insurance premiums is to buy cars in Group 1, 2, or 3. These cars have the lowest risk and are usually the cheapest to ensure. An option to consider is also getting cars reclassified to a lower group number by customizing them to feature approved security or safety systems. For instance, fitting the car with an immobilizer or an alarm system can bring its assigned insurance group down.
Another option to consider for drivers looking for cheaper premiums is to buy a hybrid car. Hybrid or electric vehicles belonging to the lower insurance groups enjoy favorable premiums rates due to the car’s higher safety features and fuel-efficient capabilities. Some insurers even provide discounts for drivers who opt for these eco-friendly cars.
Car insurance groups are an essential factor to consider when purchasing a vehicle and renewing auto insurance coverage. The assigned group number significantly affects a driver’s insurance premiums, and understanding what they mean and how they work can help car owners select the best vehicle and insurance coverage that suits them.
It pays to invest in a lower risk car if you’re keen on saving on your insurance costs. However, it’s essential to weigh other factors of a car, such as its safety, fuel efficiency, engine performance, and comfort, in addition to its assigned insurance group number. Remember to work with an experienced and reliable insurance company that can tailor-fit an auto insurance policy that suits your needs and budget.