It comes round every year. That time of year, where you have to renew your car insurance. How much will it be this year? Sometimes it can hard to guess. After all, what might have been a great price last year can seem like a distant memory when your renewal comes in. It can seem as if insurers like to keep the logic behind their prices as opaque as possible. In fact though, the basic cost of your insurance can depend on a few factors. Your history and your address make a difference. What many people are unaware of though, is how car insurance grouping affects the price.
Car Insurance Grouping
Car Insurance grouping is a system of rating the potential risk factors behind a car. It is adminstered on behalf of the Association of British Insurers (ABI). They want to know how much it is likely to cost insurers if they have to pay out on your car. As such, all cars are given a score from 1 to 50, with 1 being the lowest. Cars that are rated a 1 on the car insurance grouping scale will receive cheaper quotes that those that are rated a 50.
The ABI calculates the score with a few factors in mind. Among these are:
- Repair Costs
- Repair Times
- Car Safety
- Car Value.
Using these factors, the ABI produces a likelihood of how much the car is going to cost to repair, and as such how much your insurance should cost. This means that when you buy insurance, your insurers are factoring in their potential pay outs to you. That is why it can seem confusing when you receive your quotes. Car insurance grouping is not usually made aware to most customers, although it can be viewed on the research company Thatcham’s website.
At Axios Insurance & Reinsurance Solutions DMCC, we strive to make your renewal understandable and affordable. We explain why your insurance costs what is does, and we try to make sure that you get the price you want.