4×4 drivers to pay more for insurance
The biggest shake-up in Britain’s car insurance for 15 years is to take place – and 4×4 drivers are facing policy price hikes. That’s because for the first time a vehicle’s weight is to be taken into account when its group rating is calculated. The move means heavier cars such as SUVs will suffer. In addition, the existing 20-group structure is being scrapped, and in future will feature 50 different risk categories. The insurance industry initiated the changes internally last month, but the new system will run in parallel with the old one until July 2008.
More weight equals more damage
The reason weight is to be included in future is simple – insurers believe the heavier a vehicle is, the greater the potential for the driver to be liable for injury or damage to third parties in a collision. The fact that the bulk of some larger 4x4s means they suffer little damage themselves is seen as irrelevant. The increase in rating groups is to reflect the growing number of market segments – such as compact MPVs and lifestyle SUVs – that didn’t previously exist. A consultation process with car manufacturers has been launched to make sure they’re happy with the groupings.
Higher premiums for everyone?
Motorists are unlikely to notice any change until later this year as insurers are currently adjusting their computer systems to the new ratings. But will it mean higher premiums for everyone? The industry says not, and argues some will come down because the new structure will be fairer. For example, the new scheme includes a rethink in how repair costs are calculated. The number of car part prices considered has been increased from four to 22, to reflect more accurately the actual cost of fixing a car after a smash. The power-to-weight ratio for diesels will also now be included as a way of assessing the distinctive mid-range acceleration of these cars.
Time for change
The principles of the UK’s current group rating system have been in place for around 40 years. The last significant change took place in 1992 when the number of groups was increased from nine to 20. Details of a vehicle’s in-built protection against theft were also first considered then. But there’s been an explosion of new vehicles in the last few years. In 2002 customers had the choice of 4301 cars from 292 model ranges. But just three years later it was 6114 cars from 322 ranges. This fragmentation of the car market has created what the insurance industry has labelled ‘an unsatisfactory bunching of vehicles in certain groups’ – something it’s hoping this year’s changes will remove. So your group 20 Evo may now be in a different group from a top-end Ferrari.