CAR INSURANCE GROUPS AND HOW THEY WORK- EXPLAINED

Do you know the right type of car insurance can help protect you, your family members, passengers, drivers, and motorists? A car insurance coverage policy can cover bodily injuries and property damage costs that may arise after a car accident.

If you want to save money on your premium, it is wise to understand the car insurance groups and how they work. In today’s article, we will talk about car insurance groups and their effects on your policy’s price. Read on!

What are car insurance groups?

There are 50 car insurance groups, and each group has categorized specific cars based on their prices. It starts from the cheapest (group one) and ends with the most expensive (group 50). For instance, if you have a cheaper car, it will end up in a lower group. On the other hand, if you have an expensive car, it will be categorized in a higher group.

Generally, insurers use a specific “Group Rating System” to calculate premiums. Research institutions usually run the group rating system in collaboration with insurance companies. However, some car insurance companies use their own grouping systems. A car in a lower insurance group has lower premium costs than a car in a higher insurance group.

In simple words, if your car is in group one, you will pay the lowest premiums, and if it is in group 50, you will pay the highest premiums every month. The insurance company will decide your monthly premiums based on the group of your car.

For instance, a Skoda Citigo 1.0 SE is in Group one because it the cheapest vehicle to insure. On the other hand, Bentley Flying Spur is a luxury car categorized in the highest group, i.e. group 50.

How do insurance groups work?

Research institutions associated with the car insurance industry analyze and categorize cars in different groups based on different factors. Among them, the most important factor is the price of the car. Research institutes also consider other factors, which are:

New car values: the institute considers the prices of new cars to determine the cost of repair and replacement.

Repair times: the longer the repair time of the car, the higher is its cost and group.
Parts cost: the cost of damage and parts involved in the repair process. The higher the

costs, the more chances of a higher group rating.
Safety: cars with an autonomous braking system are categorized in higher groups.

Security: Researchers also consider factors like alarms and immobilizations system end up in higher groups due to reduced claim costs.

Bumper compatibility: a car with a stronger bumper will be categorized in a higher group. Bumpers prone to damages after accidents end up in lower groups.

Final Words

Checking or knowing the car insurance group is worth your time because it helps you understand the insurance premium. It helps you know how your next car will impact the insurance price.