Will the insurance premium depend on your car’s colour?

In the mature, highly regulated markets of the West, there has a common notion that the car’s colour might impact your car’s insurance premium. It was an urban legend, a myth and the truth is that the insurance rate has nothing to do with the car’s body colour. When an insurance company has to issue car insurance, they look at the car’s make, model, year, engine capacity, and in general what type of car it is. Typically, the owner’s driving habits and past records may also be taken into consideration while determining the insurance rate. And none of this has anything to do with the car’s colour!

So if you’re thinking that your red hatchback would attract a higher premium, you’re wrong. Insurance for the said hatchback will be the same even if it is a dark black or a placid white.

The myth that a red car’s insurance is more expensive might have originated from the fact that red is a colour most associated with car racing. And faster cars tend to have higher insurance rates when the statistical data shows that a fast car is more likely to be in an accident than a slower one. Needless to say, a brand new sports car may have a higher insurance rate than a rather old compact sedan – depending on which one of the two has a higher accident rate.

Also, your personal driving record matters a lot. If you’ve been fined for traffic violations, there might be a marginal increase in your insurance rate.

So does your car colour matter at all, when it comes to the chances of being in an accident? According to a study by Monash University in Australia, there is a relationship between a car’s colour and its crash risk, and the ambient light factors. Statistically, a car that has a high rank on the visibility index, such as white or yellow, was (according to the study) less likely to be involved in a crash than a colour low on the visibility index, say, black, blue, grey, red or green. The logic isn’t too difficult to understand – you’re more likely to spot a white car on the highway at night, than a dark grey or black one.

Visibility at night is a factor of reflecting back headlights and street lighting.


Date: 1st May 2014

Source: The Hindu Business Line


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