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.