Changes to car insurance rating systems for new vehicles
There has been a significant change to the way in which new cars are rated for insurance purposes in what has been described as a ‘more comprehensive and dynamic framework for evaluating vehicle risks.’
Brought into effect for cars registered after 1st August 2024, the new ‘Vehicle Risk Rating’ will replace traditional insurance group ratings. Where this differs from the previous Group Rating system, is that whilst previously a rating would be set at a vehicle’s launch, the Vehicle Risk Rating of a car can now move up or down throughout its lifespan, thereby increasing or decreasing insurance costs.
Cars registered prior to 1st August 2024 will still use the old scheme for a period of 18 months, allowing both insurers and manufacturers to adjust to the changes, at which time it will become the only rating system for new cars moving forward.
Vehicles will be scored between 1 and 99 for each of five distinct categories, these are:
Performance: Assesses vehicle attributes such as speed, acceleration, and the effects of modern powertrains.
Damageability: Evaluates how design, materials, and construction affect repair costs and the extent of damage.
Repairability: Emphasises ease and affordability of repairs, promoting designs that are easier to fix.
Safety: Analyses both active and passive safety systems, including features for crash prevention.
Security: Investigates physical and digital security measures, drawing on Thatcham Research’s expertise in the New Vehicle Security Assessment.
Speaking of the new scheme, Chief Executive of Thatcham Research, an insurer-funded automotive risk intelligence firm, has said:
“New technology is challenging the existing motor insurance model, prompting an unprecedented shift in the balance of risk from the driver to the vehicle.
In response, we’ve worked closely with insurance, drawing upon cutting-edge data analysis to create a rating system that offers a more precise and detailed assessment of vehicle risks. This will not only help insurance price premiums more accurately but also encourage manufacturers to consider insurance outcomes when designing vehicles.”
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