Car insurance groups: new vehicle risk ratings explained

The cost of your car insurance doesn’t only vary depending on your age and where you live, but it’s also determined by the insurance group rating of the car you’re driving. 

Currently, car insurance groups range from one to 50, with vehicles in group one much cheaper to insure than models in group 50. That’s because they are deemed to be far less of a risk to insurers than cars in the highest groups. 

The system was introduced in the 1970s to help consumers determine which cars are cheaper – and pricier – to insure. It’s all based on how much of a risk the vehicle poses to an insurance company through car theft, and how much it is likely to cost if damaged or involved in an accident. 

They are also used by insurance companies, brokers and comparison websites, along with a driver’s personal information and claims history, to calculate insurance premiums for specific vehicles. 

How are car insurance groups calculated? 

Car insurance group ratings have been administered by Thatcham Research for more than 25 years. The organisation, along with a group rating panel, which includes members of the Association of British Insurers (ABI) and Lloyds Market Association, calculates them. 

The group assigns a rating to each new car model that goes on sale in the UK, taking into account 125 factors that fall into the following categories: 

- The car's price when new

- The cost of parts and repairs, calculated by comparing the cost of 23 common parts 

- The time it takes to repair the car following a specific low-speed accident 

- The car's performance, including 0-62mph acceleration and top speed

- Safety features, such as lane keeping support and accident avoidance systems, including autonomous emergency braking (AEB) systems that react automatically and either prevent or lessen the consequences of collisions.  

- Standard car security features

- The structure and alignment of a car’s bumpers if they are designed to lessen the damage and cost of an impact

What do the letters after an insurance group number mean? 

As well as being assigned an insurance group rating number, all new cars are also given a numerical rating, denoting how good their standard security systems are. 

To assign this rating, Thatcham examines the locks and other security devices fitted to the cars.  The ratings are as follows: 

E - this means the systems fitted to a car exceed the security requirement for the type of car. A car with this rating is awarded a lower insurance group - a group 10 car that exceeds the standard will be listed as a 9E car.

A - this rating denotes that a car’s security systems are acceptable for the type of car.

P - this means the rating is considered provisional because there wasn’t enough information available when the model was launched.   

D - this means the security features don’t meet the required standard, so the car’s insurance group has been increased by one.  

U - this denotes that the level of security on the car is unacceptably low. Cars with this rating can still be insured, but they may require a security upgrade before insurance is provided.

G - this denotes that a car is an import and can’t be given a rating because it hasn’t been built for the UK market.

What is the vehicle risk rating

Insurance group ratings are being phased out and replaced with five insurability assessments that will give insurers a more comprehensive idea of the risk posed by each vehicle. 

The five assessment areas are: 

Performance - as before, this area takes into account the acceleration, top speed and new list price of the vehicle. It now also considers the type of engine or motor a vehicle has and how that impacts its insurance risk. 

Damageability - here the consideration is how the design of a vehicle, and the materials and construction used in it, influence the severity of damage to it and how much it will cost to repair.

Repairability - this assesses how well the car maker has implemented a repair strategy for the vehicle. It considers the cost and availability of parts and how easy it is to repair areas on the car that are often damaged in accidents. 

Safety - this area involves in-depth analysis of active and passive safety systems, including the crash avoidance systems that are fitted to a car, along with other relevant attributes, such as kerb weight, in order to provide an overview of the vehicle’s active safety profile. 

Security - this area uses information from Thatcham Research’s New Vehicle Security Assessment for each new car to measure the systems and technology on the car that protect it from theft and break-in. It takes into account both physical anti-theft devices and digital security protocols.

All cars get a rating from one to 99 for each of the five areas, giving insurers a far more granular view of each vehicle's risks, which should enable them to provide consumers with more accurate, individualised insurance premiums.

Why are the insurance ratings changing? 

Vehicle design and technology has undergone a massive step-change in recent years with the introduction of hybrid, plug-in hybrid and electric vehicles, and a host of active car safety improvements. 

"New technology is challenging the existing motor insurance model, prompting an unprecedented shift in the balance of risk from the driver to the vehicle,” explains Jonathan Hewett, chief executive at Thatcham Research. 

“In response, we’ve worked closely with insurers, drawing upon cutting-edge data analysis to create a rating system that offers a more precise and detailed assessment of vehicle risks. 

“This will help insurers price premiums more accurately, and also encourage manufacturers to consider insurance outcomes when designing vehicles and implementing technologies.”

In the past, insurers could rely on historical crash and repair data, but the rapid uptake and development of advanced driver assistance systems is changing the frequency and severity of accidents, and that in turn is changing the risk factors for many new car models. 

Other things the new ratings take into account include advances made by car makers to combat organised car crime, and the challenges posed to vehicle repair by the introduction of electric vehicles, which often have different structures from internal combustion engined cars. 

Why is vehicle repairability so important? 

New cars have become far more expensive and time-consuming to repair, and that means they cost insurers more. 

According to the latest data from the Association of British Insurers (ABI), insurers paid out £2.9 billion in motor insurance claims in the second quarter of 2024, up 18% on £2.5 billion paid in the second quarter of 2023. Repair costs are 28% higher, totalling £1.9 billion, and, according to Thatcham Research’s data, electric vehicles are approximately 25% more expensive to repair than their petrol equivalents and take 14% longer to fix.

All of these factors make cars more expensive for insurers, and consequently more costly for car owners to insure. 

When are the new vehicle risk ratings being introduced? 

The vehicle risk rating system has been launched, and it will run alongside the existing insurance group rating system for 18 months before it replaces the old system. It’s due to take over from March 2026. 

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