4X4 insurance bills to soar
Ray Massey, Daily Mail
22 February 2007http://www.thisismoney.co.uk/insurance/car-insurance/article.html?in_article_id=417723&in_page_id=35
Owners of 4x4s are likely to bear the brunt of changes in the way car insurance is calculated.
Drivers of Range Rovers, BMW X5s and Toyota Land Cruisers and other socalled Chelsea Tractors are likely to have to pay hundreds of pounds more for comprehensive insurance under a new risk assessment scheme to be announced today.
The changes are also likely to hit drivers of sporty diesels and even some mid-range hatchbacks.
In future, insurance will be based on the likelihood of a car being damaged in a crash - or damaging another car - and the likely cost of repair. This could add hundreds of pounds to the typical comprehensive quote, currently about £800. But the Association of British Insurers said that, overall, the rises and cuts would balance out.
The ABI insists that drivers of less risky vehicles will see their premiums fall. The changes - the first major revamp for 15 years - come on top of a continuing rise in insurance premiums generally.
Until now, each car has been given a 'group insurance rating', rising from one to 20. This is being changed to one to 50.
The ABI said: 'The formula used since 1992 as the basis of the system has not kept pace with changes in vehicle technology and the ever-increasing range of vehicle types.'
The relative 'weightings' no longer accurately reflect relative risk levels, it adds. Up to now, for instance, insurers have looked at the maximum speed and the rate of acceleration from rest to 60mph.
But this does not 'adequately reflect' the characteristics of some vehicles, such as turbodiesels which have extra torque - or 'pulling power' - at medium speeds.
That gives them an extra burst of speed which could land some drivers in trouble. The ABI also noted that the weight of the vehicle will now be taken into account - the heavier the vehicle, the greater the potential for the driver to be liable for injury or damage to third parties in a collision.
The ABI said: 'Examples are certain 4x4s that, although sustaining little damage themselves in a collision, can inflict considerable injury/damage to others.'
The ABI said that the 20-group system had worked well over the years but was in need of modernising. 'Vehicle manufacturers are becoming ever more sophisticated in the way they segment the market, creating more and more niches,' it said.
These include 'super-mini, multipurpose vehicle (MPV), compact-executive and lifestyle 4x4'. In the last three years the range of new cars has risen 42 per cent to 6,000 models. The ABI said: 'The new ratings will not bring about a doubling of premiums, although it is likely some will increase and some decrease.'
Insurers will continue to take into account other factors such as a driver's age, driving history, where the car is located and how the vehicle is used.
Car insurance has already risen by more than 4% in the last three months of last year - and the AA predicts it was already on course to go up a further 18% this year.
Premiums are rising because, despite the number of accidents falling, the cost of repairs, medical bills is rising. Passengers are more likely to survive, but face crippling injuries and make hefty personal injury claims. Uninsured drivers and fraud also add to insurance bills.