Car insurance overhauled with new Vehicle Risk Rating scheme
Car insurance is set to be overhauled with a new ‘Vehicle Risk Rating’ scheme replacing traditional insurance group ratings for new cars.
The new scheme came into effect for new cars registered after 1 August 2024.
It assesses each car for five risk areas to individual category scores for its performance, damageability, repairability, safety and security, with a car’s Vehicle Risk Rating (VRR) – a score between 1 and 99 – able to go up or down over time, increasing or decreasing its insurance costs.
Jonathan Hewett, chief executive of Thatcham Research, said: “New technology is challenging the existing motor insurance model, prompting an unprecedented shift in the balance of risk from the driver to the vehicle.
“In response, we’ve worked closely with insurance, drawing upon cutting-edge data analysis to create a rating system that offers a more precise and detailed assessment of vehicle risks. This will not only help insurance price premiums more accurately but also encourage manufacturers to consider insurance outcomes when designing vehicles.”
It’s also hoped the Vehicle Risk Rating will provide more transparency and detail for buyers looking to keep insurance costs down.
