ABI announces changes to motor insurance group rating system to reflect new cars and technology...
Changes to the motor insurance group rating system by the Association of British Insurers (ABI) will ensure that motor insurance premiums more accurately reflect changes in vehicle technology and the range of new vehicles. In the last three years the range of new cars has risen 42% to 6,000 models.
The motor 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.
Under the group rating the number of vehicle groups will increase from 20 to 50, reflecting:
• the growth in vehicle types, such as ‘city' cars;
• different repair techniques and materials;
• a wider ‘basket' of spare parts, such as air-conditioning units;
• vehicle weight, as the heavier the vehicle the greater the injury to people and property damage.
Motorists are unlikely to see any change until later this year, as insurers are currently adjusting their systems to the new ratings. The new ratings are advisory. The new system could impact on premiums, depending on individual vehicle characteristics, but will not in itself affect average premiums.
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.”
