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22/02/07
 Drivers of 4x4 vehicles including Land Rovers, Range Rovers, Mitsubishi Shoguns and Toyota Land Cruisers are likely to have to pay more for comprehensive insurance following changes to the motor insurance group rating system announced by the Association of British Insurers (ABI).
In future, insurance will be based on the likelihood of a car being damaged in a crash - or damaging another car - and the likely cost of repair. This could add hundreds of pounds to the typical comprehensive quote. But the Association of British Insurers said that, overall, the rises and cuts would balance out and insist that drivers of less risky vehicles will see their premiums fall.
The formula used in the group rating system has not been updated since 1992. The motor rating system takes into account factors such as costs of spare parts, crash repair times, and security to help insurers set premiums. The ABI believes the system has not kept pace with changes in vehicle technology and the ever-increasing range of vehicle types. In the last three years the range of new cars has risen 42% to 6,000 models.
Until now, each vehicle has been given a group insurance rating from 1 to 20. Under the new system, 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
The ABI believes the relative 'weightings' no longer accurately reflect relative risk levels. Up to now, for instance, insurers have looked at the maximum speed and the rate of acceleration from rest to 60mph. However, they believe this does not 'adequately reflect' the characteristics of some vehicles, such as turbodiesels which have extra torque - or 'pulling power' - at medium speeds. In addition, the weight of the vehicle will now be taken into account - the heavier the vehicle, the greater the potential for the driver to be liable for injury or damage to third parties in a collision.
Justin Jacobs, ABI’s Assistant Director, Motor and Risk Pricing, said: “With repair bills now costing over £7 billion 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.”
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