Motor trade dealers<\/a> will be interested to learn about the big changes now in place for car insurance<\/a>. From August 2024, the way insurance is calculated for new cars has undergone a major update.<\/strong><\/p>\n Traditional insurance group ratings have been replaced by the new Vehicle Risk Rating (VRR), which assesses vehicles based on five key risk categories.<\/p>\n <\/p>\n This new system is designed to provide a clearer, more detailed assessment of each car\u2019s risk profile, giving buyers from motor dealers<\/a> more insight into how a vehicle\u2019s design and safety features impact insurance costs<\/a>.<\/p>\n The VRR system evaluates new cars on five key categories, each rated from one to 99, to reflect different aspects of a vehicle\u2019s potential risk.<\/p>\n Below is a breakdown of categories and what they mean for car buyers, insurance brokers<\/a> and providers.<\/strong><\/p>\n One of the most significant categories in the VRR is \u201cRepairability,\u201d which strongly impacts the overall risk rating. This comes in response to rising repair costs, which, according to the Association of British Insurers<\/a> (ABI), have increased by nearly 30% since 2023.<\/p>\n Thatcham Research has also noted that electric vehicles (EVs) are about 25% more costly to repair than their petrol counterparts and require approximately 14% more time at the local motor mechanic<\/a>.<\/strong><\/p>\n The VRR will operate alongside the current Group Rating system for the next 18 months, allowing both insurers and <\/strong>car manufacturers<\/strong> to adapt to these changes. After this transition period, the VRR will become the primary tool used by insurers to set rates for new vehicles.<\/strong><\/p>\n The Vehicle Risk Rating system represents a step forward in creating a more transparent and tailored approach to car insurance<\/a>.<\/p>\n Thatcham Research, the insurer-funded vehicle risk intelligence company, describes the major change as \u201ca more comprehensive and dynamic framework for evaluating vehicle risks.\u201d<\/p>\n Unlike the old Group Rating system where the rating was set only at the car\u2019s launch, a car\u2019s Vehicle Risk Rating (VRR) can go up or down over time, increasing or decreasing its insurance costs.<\/strong><\/p>\n The Vehicle Risk Rating replaces the old scheme whereby a car was rated between one and 50, roughly determining how much it will cost to insure.<\/strong><\/p>\n![\"Car](\"https:\/\/www.unicominsurance.com\/insurance-news\/wp-content\/uploads\/2024\/12\/insurance-3.jpg\")
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