Car Insurance Risk Score UK – How Insurers Decide Pricing

What is a car insurance risk score?

A car insurance risk score be a number that shows how likely you are to make a claim with your insurer. In the UK, most companies use a score from 1 to 99 for car insurance. This score helps them figure out the insurance risk for each driver.

1 means the highest risk.
99 means the lowest risk.

A low score does not show that someone is a bad driver. It means the insurer looks at their data and thinks there is a bigger chance they will make a claim.

The risk score matters a lot when it comes to car insurance premiums. A higher risk score means you pay less for your car insurance.

This score the car insurance company uses is now a part of a big change. Insurers are moving away from the old way of putting drivers into groups by age or where they live. Instead, this new system looks at the driver, the car, where you keep it, and sometimes it looks at how you drive.

It is good to know that you can look for car insurance that gives benefits to safer drivers. If you are a safe driver, you may get better deals. Some car insurance policies have rewards when you do not get tickets or have accidents. Make sure to compare different car insurance options so you find one that gives you the best value for your safe driving. This way, you not only feel good about driving well, but you can also save money with the right car insurance.

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Why insurers use a 1–99 scoring system

Insurance companies used to set prices by looking at things like age, your home address, and how long you have been driving. Now, because of personalised risk profiles and data-driven car insurance pricing, things are different.

• use thousands of data points instead of making broad guesses
• focus on real-world risk, not just what people might think
• help cut down on fraud and wrong pricing
• change prices faster when people’s actions change

This change is something that has not happened before in the motor insurance world. It is a big shift from the existing motor insurance model.

What affects your car insurance risk score UK?

Insurance companies look at personal information, details of your vehicle, and sometimes how you drive in real-time. They use all this to make a risk score.

Car insurance risk rating factors UK

Do insurers look at credit score?

Only if you choose monthly payments.

Monthly instalments need a soft credit check. If you pay for a full year at once, you do not have to do this. Paying yearly may help lower the cost of insurance.

Compare car insurance and see if your risk score saves you money

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Vehicle risk rating and car insurance group

Insurers look at your own score and also check the vehicle risk rating. This rating system shows how safe and strong the car is, by looking at its parts and safety features.

It considers:

• vehicle design
• new materials
• cost of parts
• level of risk to repair
• kerb weight
• passive safety systems
• advanced driver assistance systems (ADAS)
• crash avoidance systems

The rating shows what car insurance group, from 1 to 50, your car is in. Cars in a lower insurance group are seen as low risk. People often get cheaper car insurance if their car is in a low risk car insurance group.

Who sets vehicle risk ratings?

Vehicle risk ratings are created jointly by:

• Thatcham Research
• Association of British Insurers (ABI)
• Group Rating Panel

Thatcham Research takes a close look at the risks of vehicles. They do a detailed assessment of vehicle risks. This helps people know more about what can go wrong with cars. You can trust that Thatcham Research will give you good and clear answers about vehicle risks.

• crash test performance
• vehicle security
• sustainable repair methods
• how likely the car is to be stolen (including relay attack risk)
• if the car lets people do repairs faster

Thatcham Research’s new vehicle security assessment looks at the security features in today’s cars. It also checks how easy it can be for someone to steal or break into the car. This model helps people know how safe the vehicle is. Thatcham Research uses this to give all of us better information on vehicle security.

This is the start of the new vehicle risk rating system.

Is the vehicle risk rating system used by all car insurance companies in the UK?

Yes.

Nearly all car insurers in the UK market use the Thatcham/ABI vehicle risk rating system. This is how they set the car insurance group and decide the vehicle risk rating. Most UK insurers rely on this system when working out a car’s insurance group and risk.

Some insurers use their own data, too, to give a personalised score. But every big provider uses the group rating system as the main foundation for pricing. The group rating system helps set the base for how they decide what you pay.

What varies is how much weight insurers assign to:

• the vehicle risk score
• the driver risk score
• telematics driving data

The balance of risk is unique to each insurer.

New car vs used car and your risk score

New cars come with safety features that can help people feel safe. But, because cars use pricey parts and complex sensors now, it can be expensive to fix them. This can make the insurance premium for a new car go up.

Used cars that have basic designs, regular steel panels, and cheap parts are lower in risk. These cars also cost less to insure.

New cars are not always cheaper to insure.

Get personalised quotes based on your risk profile

If you have a telematics policy, the way you drive will be a part of your score.

Data points may include:

• the time you drive your car
• when you go over the speed limit
• when you hit the brakes fast
• how hard you turn around corners
• when your phone moves while you drive

This enables personalised car insurance pricing.

How telematics affects insurance

Telematics has to do with the black box or an app in your car. It makes a safety score for how you drive. The company can use this score to change your insurance price in the middle of your policy.

Telematics is a good way to make your insurance premium lower faster.

Gender-neutral pricing car insurance UK

Insurers are not allowed to use gender to set prices. Gender-neutral pricing has been needed since the year 2012.

Male and female drivers can still get different prices. This is because of a few things:

• type of car
• mileage
• claims frequency

These differences come from how people act, not if they are male or female.

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How to improve your insurance risk score UK

1. Pick a car that has a low vehicle risk rating.
2. Raise your voluntary excess.
3. Add Thatcham-approved security features.
4. Keep your annual mileage close to what you actually drive.
5. Use telematics to help boost your driving score.
6. Grow your no claims bonus.

You can look at car insurance to find plans that give you better rates if you drive safely. Some companies may offer you lower prices or special rewards for good behavior on the road. It is a good idea to check and see which options will work best for you. Use the right car insurance policy to save money and feel safe on your trips.

FAQs about car insurance risk scores