Guide to car insurance groups

Insurance groups are one of the most important things to consider when buying a car.

When it comes to pricing up a new car, insurance groups simply cannot be ignored as many different factors come into play, leaving some motorists in an unfortunately expensive predicament.

Before you even consider searching for cheaper car insurance, you may have to think ahead and find out how you can keep costs down, whether that is by buying a car in a specific segment or buying a car with a certain engine.

But firstly, let's take a look at the basics.

What is car insurance?

Car insurance provides financial support for motorists in the event of a traffic accident or incident resulting in injury or damage.

For example, if you are in a car crash and you get whiplash, your car insurance can cover you for medical bills and mechanical repairs - this is obviously dependent on what insurance policy you have.

You need car insurance to drive on the road and if you don't have insurance whilst driving, you are breaking the law. There are many different types of insurance, each one with different cover criteria. Below are some of the most common insurance types you may have heard of:

Third party car insurance - This covers injury to passengers and other vehicles, as well as immediate emergency medical costs.

Small damages like broken interior equipment and smashed windows aren't usually covered. This is a very basic type of car insurance; however, it can be made more comprehensive with the addition of extra features, like Third Party Fire and Theft.

Fully Comprehensive car insurance - This is usually the all-inclusive type of insurance, which covers everything from medical to vehicle costs, as well as broken windows to stolen car radios.

Specialist groups - Many different factors come into play with certain drivers, whether it is their gender or age, and for this reason specialist group insurance can be very beneficial as they offer specific cover depending on the individual driver. These groups include Female driver, Young driver and Students.

How do insurance groups work?

Before the driver themselves are even considered, each new car is given its own assessment and applicable insurance group.

There are 50 different insurance groups, one being the cheapest and 50 being the most expensive.

The decision of which new cars belong to which insurance group, is down to the Group Rating Panel. Group Rating Panel meets every month to discuss whether or not the groups should be altered, which is dependent on new car releases and other factors of the automotive industry.

There are a range of different factors of a new car that the Group Rating Panel considers as important assessment criteria.

These can include maintenance factors, like the cost of potential damages and repairs, a cars performance credentials and its retail price.

For example, if you buy a £60,000 Jaguar XJ with a 3.0-litre diesel engine, its group is going to be considerably higher than a £10,000 Fiat 500 with a 1.2-litre petrol engine.

How is car insurance calculated?

As car insurance is about financial support after accidents and mishaps on the road, if you are seen as a 'potential danger', then your insurance premium will be higher than others.

There are many different ways you can be risk assessed, and this is usually split into two different categories - factors about yourself (age, gender, occupation) and factors about your driving (annual mileage, driving penalties, parking habits). Click here for more information on how insurance premiums are calculated.

These factors are taken into account by insurance underwriters; these are the people that calculate insurance premiums. After entering your details into a set algorithm, you will be given an insurance premium.

This algorithm also contains other motorists details, which means your insurance premium can be largely based on the habits of similar drivers to yourself.

However, these calculated insurance premiums are merely guide lines for insurance companies, and will probably be subject to change.

When it actually comes to insuring your car, all of your facts and figures from your personal assessments and vehicle category will be calculated into a final insurance premium.

How can I get cheaper car insurance?

It all comes down to 'playing ball' with the insurance companies, which means keeping each aspect of your driving as free from risk as possible.

Driving habits is a big part of this. If you are caught speeding or have had a crash prior to taking out insurance, the insurance company will know and will see you as more of a risk on the road, therefore your premium will be higher.

But as far as your own personal information goes, like age, gender and occupation, you can't do much about it, except for maybe choosing a specialist insurance group, like a Young Drivers group.

One of the most effective ways of keeping your insurance premium down is to be careful about what car you buy. A low price tag is one thing, but it may not necessarily be the best option, especially if it has a big engine.

If you want a lower insurance premium, then find a car that has a low price as well as a small engine - and if possible, a car that is reliable and cheap to repair. Although it's hard to specify exactly what car ticks all of these boxes, small city cars and superminis usually offer all of these qualities.


For example, the Kia Picanto has a £7,545 price tag as well as a range of small engines, the smallest being a 1.0-litre petrol with just 68bhp. The Fiat 500 is also a popular low insurance premium choice as it offers a small 0.9-litre TwinAir engine with 85bhp power output. Click here for more information on how to get cheaper car insurance.