Is Insurance Higher on Red Cars?
Insurance Q&A: “Is insurance higher on red cars?”
I think we’ve all heard this question at some point in our lives. And you’ve probably been told that red cars are more expensive to insure.
I guess the thinking is that all the fast or “cool” cars are red. The Ferrari poster I had on my wall when I was a kid seemed to back up the statement.
But is it actually true? Do insurance companies charge a higher insurance premium for red cars?
The answer is NO. Insurance companies do not use vehicle color as a rating factor (how are car insurance rates determined).
But there are definitely aspects of the vehicle taken into consideration.
Namely the make, model and year the vehicle was manufactured. These three unique identifiers make up what is referred to as a vehicle’s “symbol.”
Each insurer designates a different symbol to each vehicle in their rating structure. Let’s explore why these factors are considered.
Make and model are considered to determine the cost to repair the vehicle in the event of a physical damage claim, or worse, if the car is totaled.
For example, it is quite a bit more expensive to repair a Lexus than a Honda (parts, etc.). Therefore, you can expect to pay more to insure the Lexus. It’s simple math to the insurance company.
The year your vehicle was manufactured also comes into play when determining your rate. The older a vehicle is, the less it is worth and the less you can expect to pay to insure it for physical damage coverage.
In fact, there is a point where, if you can afford to purchase a new vehicle in the event yours is damaged in an accident, you may want to remove the physical damage coverage (which includes collision and comprehensive coverage) from your policy.
For example, if your car is only worth $1,500, you may not want to cover it for physical damage, as the cost to insure it may be more than the cost to replace it.
How does this relate to liability insurance?
Well, color still has nothing to do with your final insurance premium, but the symbol, or make, model and year, are a factor here as well.
Unlike the physical damage coverage, which is based mostly on the car itself, liability insurance rating focuses on the driver of the vehicle.
The same car, a Mustang for example, driven by a 16 year old would cost substantially more to insure for liability than if driven by a 55 year old. Much more so if we’re talking about a male teenager.
All that said, some argue that most sports cars are red, and because sports cars are the most expensive cars to insure, insurance rates on red cars (mainly sports cars) are higher.
Oh and red sports cars are often driven by “aggressive drivers,” so that makes them all the more expensive to insure, on average.
If you drive a red car and need car insurance, don’t fret.
Each state has a Department of Insurance that verifies all insurance companies are charging a reasonable amount, so you can be sure you’re not paying an inflated or discriminatory price.
It is recommend that you compare quotes online or speak to a local independent agent to ensure you’re getting the best insurance coverage at the lowest available rate.
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