What color is your car? Many people think that the answer to this question matters to their auto insurance companies. It is a commonly held belief that people who drive cars that are white, or beige, or a neutral color, pay less on their car insurance premiums than people who drive red cars. This is simply not true.
There are many people who say that you shouldn’t purchase a car that is red because it will cause your auto insurance company to raise the rate of your premiums. This is, quite possibly, the biggest myth about car insurance. It goes along with another commonly believed myth – that people who drive red cars end up being issued more speeding tickets than do drivers of other cars.
The truth is that car insurance companies typically don’t ask people what color their car is on an application for auto insurance coverage. This is because the color doesn’t matter. The actual color of the car doesn’t really have an effect on the things that car insurance companies are concerned about.
All insurance companies, no matter if they are for your car, your house, or your health, are very interested in assessing the amount of risk that you represent to them. People who they see as high-risk are ones that the insurers think are going to end up filing lots of claims. Insurers want to select customers who are the least likely to file a claim. The insurers want to avoid spending money on claims, because it lowers their potential of making a profit.
Certain factors will raise the cost of your car insurance premiums. People who drive minivans usually pay less on car insurance than do people who drive flashy, expensive, sports cars. This is because, statistically, the people who are interested in driving fast cars will want to speed. This can result in speeding tickets, and accident claims. The color of the sports car doesn’t matter. It is the behavior of the driver that makes the difference.
Men who are in their twenties generally pay the most for car insurance. It is because this group is the most likely to take risks while they are driving. Risks can lead to accidents, which can lead to insurance claims. Women in their twenties are seen as less as a risk than their male peers are to insurers. Men and women who are older than thirty are also seen as less risky to insure.
Image by Stefano Mortellaro on Flickr