New car insurance changes in the UK – Vehicle Risk Ratings explained
Vehicle Risk Ratings replace car insurance groups – what does that mean for your premiums?
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Car insurance groups replaced with Vehicle Risk Ratings
Big news – car insurance is switching up. The traditional car insurance groups that we’ve become used to are being phased out by the new ‘Vehicle Risk Ratings’.
Straight from Thatcham Research (the UK’s only not-for-profit automotive risk intelligence organisation), this new system will switch up how car insurance prices are calculated.
New vehicles will be assessed based on performance, desirability, repairability, safety, and security, while older models stick to the same one to 50 grouping system as before.
Get the details in our guide below.
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When are insurance groups being replaced?
Don’t stress - it’s not the case that all car insurance is being turned on its head. Only new vehicles registered from 1 August 2024 have the new rating.
The older insurance group system was introduced in 2009 and includes 50 different groups, although the first iteration of the system came about in the 70s.
Just like when the latest car insurance groups came into play, cars registered before their introduction got to stick to the old insurance rating system.
Vehicle Risk Ratings explained
So, what exactly are the five new scoring points for the Vehicle Risk Rating Assessments?
Performance
Cars will be assessed based on their performance credentials and how these might be increase or decrease insurance risks.
You can expect several different areas to be evaluated:
Acceleration
Top speed
List price
Drivetrain impact
Power systems
Damageability
The second point of assessment is the damageability of the car – which can basically be described as how easy it is to smash up and how much it will cost to repair.
There are a few areas that are looked at to decide the severity and price of fixing the car. These include:
Vehicle design
Materials
Construction techniques
Repairability
This one is a bit trickier to get your head around, but repairability is essentially how easy it is to repair the car.
There will need to be a ‘transparent and readily available repair strategy’ for cars to score well and the cost of parts also comes into play.
From what we can assume, it’s likely that uncommon cars with unique technology and expensive parts will be considered higher risk.
Safety
The fourth factor is safety, so that’s pretty self-explanatory. This will look at things such as crash avoidance systems and kerb weight.
Security
Finally - the security rating looks at how, well, secure your car is.
This comes from Thatcham Research’s New Vehicle Security Assessment and considers areas like anti-theft and break-in prevention systems.
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Vehicle Risk Rating scoring system
The new system rates each five pillars as one to 99. One is the lowest risk, while 99 is the highest and will therefore typically cost more to insure.
These scores are based on real-world claims, with Thatcham Research stating it’s a ‘more advanced and dynamic’ assessment.
One of the best things about the new system is that manufacturers can make the ratings accessible.
They can share how the vehicle performed in each of the five groups, so we’ll know which cars perform the best and in what area.
Risk Rating evaluations
We don’t have exact details on how these evaluations are carried out, but Thatcham Research says it uses ‘real-world claims data and aggregated to provide an overall insurance risk score’.
The Vehicle Risk Ratings are 18 months in the making and started with a study to pinpoint the most helpful car data for judging insurability.
Why is car insurance changing?
There’s been plenty of new car tech and intricate software on the market in recent years, and with this can come new issues.
It makes sense that providers want an updated system to assess the insurability of vehicles as the old set-up becomes outdated.
There are new materials, new building processes, complex software, and other advanced technology that hasn’t previously been as widely (or at all) considered in insurance assessments.
Plus, cyber security has become an area of concern as more vehicles are able to connect to the internet.
You won’t need to change anything with your insurance process if you're buying a car registered after 1 August. It’ll still work in the same way, just how much it’ll cost is decided a little differently behind the scenes.