Paint The Town Red
For those of us who write personal lines, and especially automobile insurance, we are all well aware of the fact that there are quite a few factors that contribute to the price of an auto insurance policy. For instance, we have age, gender, marital status, territory, type of vehicle, tickets, accidents, consumer credit, color, and some other factors as well. Wait a minute….did I say “COLOR”?!?!
Think about this for a second: how many times have you had one of your insured ask you, “Is it more expensive to insure a red car? Do red cars get more tickets? Will I increase my chances of being involved in a car accident if I drive a red car?” Well, we all know that none of those myths that state a correlation between vehicle color and insurance premiums I just mentioned are true or even remotely correct…or are they?
Personal taste typically dictates what color car a person chooses when they purchase a new vehicle. In addition, certain makes and models of vehicles are also a huge determining factor when choosing what color to purchase. For instance, a person buying a sports car may be more likely to choose a bright color—such as red, yellow, or orange—while someone purchasing a full-size sedan luxury car might have a much greater preference for a more subdued color, such as black, white, blue, silver, or gray.
Now here is where the connection between a vehicle’s color and insurance premiums come together, but it may not be the result that you are expecting. We all agree, and it is fact, that the number of accidents that a person has been involved in will directly impact their car insurance costs. A couple of years ago, in 2014, a study by the Insurance Institute for Highway Safety showed that black cars are involved in the most accidents, over 12% more likely to be in a crash than cars of other colors. Now if you factor in time of day, dawn and dusk increases that percentage greatly to 47%. Grey and silver cars were next, as far as vehicles most likely to be involved in a crash.
What about the car colors that are the least likely to be involved in an accident according to the study? Orange, red, and white. So, depending upon the color of the car that you drive, you may be increasing (or decreasing) the chances that you are involved in an auto accident, and we all know that the more accidents you are in, the higher the price that your car insurance will be. Therefore, driving a black, grey, or silver car may end up costing you more for insurance.
Now let’s take this color connection a step further. We also will all obviously agree that the number and frequency of claims also has a detrimental effect on the price of an auto policy…especially with respect to comprehensive and collision costs.
While it won’t directly cut your rates, the color of your car may make it more, or less, likely to be stolen. Allow me to explain further: a very bright color, such as yellow, may be more effective than any passive alarm system or tracking device that you can buy, as the brighter the color, the less likely a car thief is going to steal it. So, what is the least likely color car to be stolen? Yup, you guessed it! Red! It is followed by yellow, orange, brown and green colored cars. The reason for this is that it is much easier for a professional thief to resell a popular color, than a not so popular color. According to a 2012 report by CCC Information Services, red doesn’t even register in the top five vehicle colors that are most frequently involved in thefts. Car thieves prefer green, gold, black, and white cars, and their No. 1 pick is silver, as a silver car is stolen nearly 40% more often than any other.
So, if you want to purchase a car and choose the color based on the likelihood of it either being involved in an accident or being stolen, a red car is probably the best choice. The bottom line here is that the next time one of your insured comes up to you and asks if it will be more money to insure their car because it is the color red, tell them no, as in the long run a red car might actually end up costing them less money to insure!
Well, as the weather cools down, the 2017 insurance convention season is beginning to heat up. Next time we will be talking about the PIA RAP Conference in Manhattan coming up later this month, as once again this will prove to be a very informative and entertaining event…hope to see you there! Until then, Ciao for now!
