Vehicle risk ratings explained & how they affect the cost of your car insurance

Vehicle Risk Rating is a car insurance grading system that applies to all vehicles registered on or after 1 August 2024. Here’s a look at the regulations – and how they could affect your insurance premium.

For many years, car insurers have used a system of group ratings to help work out how risky it is to insure a particular vehicle. Risk is based on the safety features of a car and the cost of repairs in the event of a claim. But the way in which they assess that risk is changing. A new system, Vehicle Risk Rating (VRR), was introduced in the UK in September 2024 for models sold from 1 August that year – and it could have implications for the cost of your insurance.

The new approach is designed to give insurers a detailed picture of how more modern vehicles perform, how safe they are and how expensive they are to repair. Any vehicles sold before 1^st August 2024 will still be assessed under the old insurance groups ratings system. Take a look at this article to find out what insurance group your car is.

In this guide, we explain what VRR is, how it compares to traditional car insurance groups, and what it could mean for the cost of your cover.

What are car insurance groups?

Traditionally, cars in the UK have been placed into insurance risk groups ranging from 1 to 50. The lower the group, the cheaper it usually is to insure the vehicle. However, this isn’t always guaranteed, as insurers also look at a range of other factors when calculating premiums.

Traditional insurance group ratings have been based on considerations such as:

• How much the car costs
• How expensive it is to repair
• Its performance
• Its safety features
• Its security features

This method has been used for many years and is still something drivers will come across when researching a car or comparing insurance quotes. But the new system will, over time, become the standard way vehicles are assessed for insurance purposes.

What is VRR?

VRR was developed by Thatcham Research, the UK’s automotive risk intelligence and vehicle security authority, and is a new way of assessing how risky a vehicle may be to insure. It was introduced to reflect the fact that modern cars are far more advanced than they used to be. Many now include features such as parking sensors, cameras, driver assistance systems and other technology that can affect both safety and repair costs.

As vehicles become more advanced and connected to the environment around them, the old system of insurance groupings has become less and less relevant. VRR gives insurers much more detail and insight, helping them build a clearer picture of the risk posed by a particular vehicle at any one time.

How does VRR work?

VRR considers five main risk factors:

• Performance: how powerful the vehicle is
• Damageability: how easy it is to damage the vehicle
• Repairability: how easy and affordable it is to repair the vehicle
• Safety: how effective the passenger safety features are
• Security: how well the vehicle is protected against theft

Under the new model, a car is scored in each category – from 1 (lowest risk) to 99 (highest risk). Unlike the old static system, these scores are informed by the latest risk data, meaning your car’s rating can change over time.

Why has the system changed?

While modern vehicles are often safer and more advanced than older models, they are becoming more expensive and complex to repair.

For example, even a relatively minor accident may now involve replacing sensors, cameras or other specialist parts, which increases repair costs. The rise of electric vehicles has also played a part, as they often require specific parts and repair methods.

Are car insurance groups still used?

For now, you may still see car insurance groups when researching a vehicle because the new VRR system is being introduced gradually, rather than replacing the older system all at once. VRR applies only to new model ranges sold from 1 August 2024. If your vehicle is older than 1^st August 2024, you may want to find out what insurance group your car is

How to check your vehicle risk rating

If you want to get an idea of what rating your car would receive – whether that’s through VRR or the old system – there are a few different ways to check.

Online tools

Some websites and comparison tools show insurance group information, which can be useful when researching a car before buying it. If you know the car’s registration number, this will usually give you the most accurate result.

Vehicle paperwork

If you already own the car, the paperwork can help confirm the exact model and specification, which insurers may use to calculate your premium.

Your insurer

If you already have cover in place, your insurer should be able to explain how your vehicle has been assessed and whether any particular features are affecting the cost of your policy.

Does a lower-risk rating mean cheaper insurance?

A vehicle with a lower insurance group or lower-risk rating may be cheaper to insure, but it won’t be the only factor your insurer considers. For example, one car may be relatively cheap to repair but more vulnerable to theft, while another may be more expensive to buy but includes safety and security features that help reduce the overall insurance risk.

That’s one reason VRR has been introduced – it gives insurers a much more detailed view of individual vehicles and the risks they pose, rather than relying too heavily on broad categories.

Can a car’s insurance risk rating change?

Traditional car insurance groups are fixed but the new VRR system is designed to be more dynamic, meaning a vehicle’s rating can change over time. This is because an insurer’s view of risk is informed by factors that can change quickly and often, such as:

• Repair costs
• Parts availability
• Theft trends
• Safety developments
• Claims data

So even if your car hasn’t changed, the way it is viewed by insurers might.

What else affects the cost of my insurance?

A vehicle’s rating is just one element of how your premium is calculated. Insurers will also take into account wider market conditions and your own personal circumstances.

External factors

The price of your insurance can be affected by things like:

• Inflation
• Rising repair costs
• Parts shortages
• Labour costs
• Theft and claims trends

Personal factors

Insurers will also take into account things like:

• Your age
• Your address
• Your mileage
• Your driving history
• Any previous claims or convictions
• Your No Claim Discount (NCD)

This means two people insuring the same car could still receive very different quotes.

Find out more about why your car insurance has gone up, or check out our guide on how to bring your car insurance costs down for more information. Or find out more about the Car Insurance available through us.

Summary

When it comes to VRR and your car insurance, here are some key points to remember:

• Cars have traditionally been placed into insurance groups to help insurers assess risk.
• The new VRR system goes deeper, focusing on performance, damageability, repairability, safety and security.
• This new system is designed to reflect the growing complexity of modern vehicles.
• A vehicle’s rating can affect the cost of insurance, but it is only one part of how your premium is worked out and, under the new system, can change over time.
• Other factors, such as your age, mileage and driving history, will still affect the price you pay.

While it doesn’t represent your full risk profile, if you’re comparing cars or looking for cover, it can still be useful to check how a vehicle may be viewed by insurers before you buy. You can find out more about the Car Insurance available through Age UK Trading here