It was in 1930 that the UK government of Ramsey MacDonald introduced a law requiring every vehicle user to have at least a third-party personal insurance arrangement.
Today, the car insurance industry in the UK has skyrocketed in size and value. In 2017, there was nearly a car for almost every two people in the UK. The year before that, car insurance companies in the UK paid out approximately £23.6 million per day.
Nowadays, driving a vehicle you are not insured to drive can earn you a fine of £300 and six points on your license. If the case goes to court, the fine can become unlimited and you could even be disqualified from driving.
How Does Your Insurance Group Affect The Price?
I know what you are thinking: does my insurance group affect my quote? The primary factor behind your car insurance premium is the insurance group which your car belongs to. Each car built to be driven in the UK is assigned an insurance group by law.
There are 50 groups in total, with the decision made by a Group Rating Panel consisting of members from the Association of British Insurers (ABI) and Lloyds Market Association (LMA).
The factors taken into consideration when determining your car’s insurance group
· How much it would cost to repair a damaged vehicle?
· How long would it take to repair the car/availability of parts?
· The cost of the car/performance of the car.
· The car’s security features – the more secure it is, the less likely it is to be stolen.
How the Type of Car Affects Insurance Premium
As you might have guessed, in simple terms, the largest factor affecting your car’s insurance premium is its quality. Insurance for a Vauxhall Corsa is not going to be as expensive as for a Ferrari or Lamborghini.
Likewise, purchasing insurance for a BMW or a Lexus is still going to be significantly more money-draining than if you were trying to insure a Ford Fiesta or Renault Clio.
This makes sense: crashing a Ferrari and having to replace parts of it is going to be a lot more expensive than if you were driving a bog-standard hatchback.
How Driving History Impacts Car Insurance Premium
In addition to the quality of the car, another key factor affecting the cost of your car insurance premium is the driver’s history. A lack of driving history, which is the case for first time drivers, is going to increase the cost of your car insurance premium.
This is reasonably understandable, as newer drivers are less experienced and skilled and are therefore more likely to find themselves embroiled in costly crashes.
There are also other factors that can affect the cost of your car insurance premium. For example, a convicted criminal who has spent time behind bars might find that his car insurance premium is coming in higher than he/she might have hoped. This could be exacerbated if he/she was initially locked up for driving under the influence.