How do new car insurance ratings work?

Every car and light commercial vehicle (LCV – like a small van), new or old, falls under a particular insurance group, which dictates – to some extent – how much to insure. The higher the group number, the higher the cost contribution, before the driver, address and other factors are taken into account.

Insurers use these groups to help quantify the risk associated with that particular vehicle. Until 2006 there were 20, but today there are 50, to cope with the range of models offered by certain manufacturers, often dozens in the same range.

How are insurance ratings determined?

Thatcham Research in Berkshire was set up by the insurance industry and tests vehicles and reviews the data which it then passes on to the Association of British Insurers (ABI) Group Rating Panel. There are just over 110,000 different derivatives in Thatcham’s vehicle database, comprising vehicles dating back as far as the early 1930s to today’s latest Polestars and Teslas.

This is used to establish an advisory assurance group score. Thatcham emphasizes that his notes are recommendations only. Individual insurers use the recommendations but consider their own passenger car experience, based on the number of claims they have had. The data is updated weekly as new cars hit the market.

Group ratings currently include, but are under constant review, the cost and time it would take to restore a vehicle to its original condition after an accident, the new vehicle price – reflecting variations in levels of finish (back to those big ranges), the cost of settlement in the event of a total loss, the performance of the vehicle – including its 0-60 mph acceleration time and top speed, and the sophistication of the equipment of standard vehicle security.

The price of parts is also taken into consideration – Thatcham uses a standard list of 23 parts which are considered to be the most commonly damaged panels and components in an accident – and the standard fitment and performance of emergency braking systems Autonomous Braking (AEB), sometimes referred to as city braking by some car manufacturers.

But what decides a band is more complicated than just high value and performance. Sometimes manufacturers place a high-value component – such as a self-contained safety sensor – behind a bumper where it can easily be damaged, even when shunted at low speeds. Although these can be expensive to repair, the safety rating is increased, so the insurance group is lowered. When a car is refurbished or updated, a whole combination of factors, such as acceleration, weight and repair times, affect the group.

David Alder, senior product manager at Thatcham Research says: “Bundling a car is important, but it’s only part of the overall mix of an insurance quote. What the customer pays for insurance is also influenced by who is driving the car, where they live, what their occupation is, their credit rating and many other risk factors.

Some examples of cars and their groups

The current Hyundai i10 is a city car with a small 1.0-litre engine and costs around £13,000 new. Its different versions are grouped in groups 1 to 7. The small SUV Nissan Juke goes from group 11 to 14.

For the Volkswagen Golf range, it’s from 14 to 24. As you might expect, the high performance versions of the family sedans will be more to be insured because they are the most expensive in the range to buy, and the faster.

The Land Rover Discovery range comes in Groups 33 to 45. The Audi Q5 SUV ranges from 23 to 42 and – unsurprisingly here – any Bentley will be rated at the highest level of Group 50.

In addition, Thatcham assigns a letter to each grouping which tells the owner/buyer how they rate the safety of the car. A A means that it meets the security requirements for this group. D means it is not and increases the group by one or two. and E is given when it exceeds the safety requirements for a car of that type and the group rating is reduced.

For example, a 2021 Dacia Duster Prestige TCe is priced at 22D and has a list price of just over £20,000. Of similar size and power, the comparable E example is the DS 4 Bastille + PureTech 2021, which has a list price of just over £25,000 but prices at 19E.

Electric cars introduce different factors into the group grade calculation. They are often heavier, generally accelerate faster and the cost of replacing batteries can be up to 50% of that of the car. They are also generally more expensive than their combustion engine counterparts, all of which affect the calculation. A 1.2-litre petrol-powered Vauxhall Corsa Ultimate Nav automatic is currently £26,075 and Group 17E. An electric Corsa-e Ultimate Nav costs £29,660 and Group 25E.

How can I check a car’s insurance group?

Many new car buying websites, magazines and the specification part of new car brochures will state the insurance group, although it is always best to check the official source as ratings can change. Thatcham has its own group classification search function which will provide the group number and, where applicable, Euro NCAP safety ratings for new and older cars.

For more information on car insurance, visit the Association of British Insurers (ABI) website.

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