Is The Old Insurance Groups System Still Working?

IE only asks this question because new info from MoneySuperMarket suggests that owners/leaseholders of prestige cars are automatically being placed in a high risk group. Sure the car has more value than a Ford Focus, but is the PI, typical bumper repair or third party/passenger injury risk really that different? Drivers with cars in the highest insurance groups are paying 38% (£248.79) more than those with cars in the lowest insurance groups, says new research by MoneySuperMarket.

Then there’s all the postcode related data on car vandalism, theft, localised flooding in winter etc. Those factors affect all the cars parked in the same street, not just the Teslas, surely? If the risk is the same, why is the premium 38% higher? So maybe it’s time we binned off the groups system, instead of just making it ever bigger – yep, there are plans to extend it to 70 insurance groups. The thing’s expanding faster than Bitcoin server capacity.

Here’s the word from the MoneySuperMarket crew;

Makes and models in the higher insurance group tend to be newer, more expensive and more powerful. Research by leading price comparison site, MoneySuperMarket, shows that cars in the highest bracket (41-50) cost drivers £906.08 annually to insure on average. In comparison, cars in the lowest band groups (1-10) cost £657.29 on average.

Looking across the UK, drivers in the City of London, London’s West End and West Central London have the largest proportion of enquiries for car in the highest groups. The most popular cars in these groups include the Land Rover Range, BMW X5, Tesla Model-3, Jaguar XF and BMW 530.

At the opposite end of the scale, residents in Dumfries and Galloway, Llandrindod Wells and Swansea have the largest proportion of enquiries in groups 1-10. The most popular cars in this bracket include the Vauxhall Corsa, Ford Fiesta, Volkswagen Polo, Toyota Yaris and Renault Clio. Vehicles that fall within groups 1-10 are valued at £1,595 on average – £17,850 less than the average value of vehicles in groups 41-50 (£19,445).

The data shows 6.2% of all enquiries made by men were for cars in the highest insurance groups compared to only 2.3% of female enquirers. Comparatively, over a third (37.5%) of enquiries for women were for cars in the lowest insurance groups (1-10) compared to just a quarter (24.2%) for men.

According to the data then, it’s men who buy more expensive cars, yet the industry is not allowed to discriminate on gender. Men and women who buy expensive cars should, in theory, pay the same premiums. Of course, the survey makes no mention of men or women who identify as gender fluid, or a different gender from that assigned at birth. And IE can tell you that new thinking like that is going to disrupt car insurance in a big way over the 2020s, there is no escape from the Wokerati online. Get set to re-design all quote and claims forms, check your privilege, reconfigure your data to cancel the unconscious bias and spend more time calming people down as part of your insurance marketing strategy. Seriously.

Use MoneySuperMarket’s new group checker to find out the insurance group for your current car using your registration, or by entering a make and model if you are considering which car to buy.