Changes to the motor insurance group rating system announced today by the ABI will ensure that motor premiums more accurately reflect changes in vehicle technology and the range of new vehicles.
Under the group rating the number of vehicle groups will increase from 20 to 50, reflecting developments such as the growth in vehicle types and different repair techniques and materials.
The new system could impact on premiums, depending on individual vehicle characteristics, but will not in itself affect average premiums, the ABI said.
In the past three years the range of new cars has risen 42% to 6,000 models.
The insurance group rating system takes into account factors such as costs of spare parts, crash repair times, and security to help insurers set premiums. It was last reviewed in 1992.
Justin Jacobs, ABI's assistant director, motor and risk pricing, said: “With repair bills now costing over £7bn a year, these changes will help insurers keep pace with technological changes and more vehicle types to ensure they continue to provide value-for-money policies for customers.”
