There seems to be endless types of car insurance in today’s world and everyone needs one because you have to protect your car and your wallet if something bad happens to your car. There are a lot of car insurance companies and they have all kinds of insurance so people get confused by it. If you do not know which one you need we can help you with it. First of all, every car belongs to one of the fifty car insurance groups. Starting from cheapest to most expensive. If you have a rarer, more expensive car you will be in a higher group. These groups are created because there are numerous kinds of cars and rating them one by one can take ages. So as you can expect, if you have an expensive car its insurance will also cost more than any other cars below yours. So how are these groups decided you might ask and we shall explain. Association of British Insurers and the Lloyd’s Market Association came up with a measurement for all the cars. Groups are decided by group rating panels by the members of the said associations. There are a lot of factors when deciding what group your car belongs to. But do no worry, we are also going to tell you what those are. Damages and part costs is one of them. If you damage your car you will need parts for the damaged areas and if the parts are expensive your car will be higher in the group system. Another factor is repair times. If your car needs repair every one or two month it is going to be in a lower group. This is according to Thatcham Research. It says all money paid out in insurance goes to the repair or parts so that is why repair time is a major factor in pricing motor insurance. Another factor is safety. How safe is your car for the driver and the passengers can determine which group your car is going to be in. Car security is also one of the factors. The safer your car, the cheaper the insurance but if you happen to lose a key it will be costlier to replace it. If you want to cut the cost of the insurance there are some tips we can give you. Pay as you use the car and enhance your car’s storage and its security. These can help you to cut the cost.
About the author
Hello, I am a savings economist at GrayAction and an expert in personal finance. I hold a master's degree in economics from Stockholm University. I hope you will enjoy reading my articles on finance categories on the site.