Car Insurance Groups Explained

Car insurance groups are crucial in determining the cost of insuring a vehicle. Here’s an overview of how car insurance groups work and what the letters on car insurance groups mean:

How Car Insurance Groups Work: Car insurance groups are assigned to every new vehicle in the UK and are rated on a scale from 1 to 50. The lower the insurance group, the cheaper it is to insure the car, and vice versa. These groups are set by the Group Rating Panel, an industry body composed of members from the Association of British Insurers (ABI) and Lloyds Market Association (LMA).

The factors considered when assigning an insurance group to a vehicle include:

1. Cost of Vehicle Repairs: This is a significant factor as most insurance claims involve repair costs. The repair costs are assessed by studying the effects of a car crash at a speed of 15km/ph. The analysis considers both the cost of parts and the required repair time.

2. Purchase Price of the Vehicle: The cost of the vehicle itself is considered. More expensive cars typically fall into higher insurance groups.

3. Vehicle Performance: Factors such as acceleration and top speed are evaluated. High-performance vehicles often fall into higher insurance groups.

4. Vehicle Security: Security features, including anti-theft measures, play a role in determining the group rating.

5. Safety Features: Safety features like Autonomous Emergency Braking (AEB) are considered.

6. Replacement Parts Cost: The cost of replacement parts from a standard list is considered.

Letters on Car Insurance Groups: The letters on car insurance groups denote the vehicle’s security features as determined by Thatcham Research. These letters help distinguish cars within the same group based on specific criteria. The current values used are as follows:

• E – Exceeds the security requirement: The car’s group rating (numeric value) is decreased as it exceeds the needs of its group.

• A – Acceptable Security Requirement: The car meets the requirements of its assigned group.

• P – Provisional: The data was incomplete when the car was classified.

• D – Does not fulfill the group’s security requirements: The car’s numeric group rating is increased as it does not meet the required security standard of its group.

• U – Unacceptable Security: The level of security offered is not acceptable by the industry body, as the car falls significantly below good standards.

• G – Import: The vehicle is an import and does not carry a standard rating. The rating scheme only covers vehicles manufactured for the UK market.

Cheapest Cars to Insure: The most affordable cars to insure are typically those in Group 1. These cars have low performance, adequate safety and security features, and low repair costs. They are often suitable for young drivers or provisional license holders. In 2020, examples of such cars included the Nissan Micra, Hyundai i10, Volkswagen Polo, and Volkswagen Up.

When purchasing a car, it’s essential to research its insurance group rating and other factors like your driving history, accident claims, and location, as these elements collectively impact the insurance premium you pay.