Auto Insurance Rates and The Red Car Myth

Insurance rates are calculated with many factors

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Myth or Fact that Red Cars Have Higher Insurance Rates

The truth is… that red cars do not invoke higher auto insurance rates. There have been no conclusive studies that link the color of a car to risky driving. People have assumed that a bright red color is associated with sports cars, therefore insurance carriers associate it with speed and dangerous driving. Additionally, there have been no associations with color and an effect on mood, behavior and health. So, go ahead and get that red car if you want and don’t worry about having to pay higher rates because of the color.

What is Considered in the Rates?

If color is not a factor in calculating insurance rates, then what is? Insurance carriers take into consideration a variety of things that help them assess the risk of insuring a car/driver.

Driving History

Driving history is absolutely a factor in calculating risks. Insurance companies may look at any accidents that you have been involved in, any moving violations (speeding tickets, reckless driving, etc.), and whether your license has been suspended or revoked. If your driving record is spotless, you are likely to be presented with low insurance rates whereas someone with points on their driving record will get higher rates even though it is the exact same policy. Being a safe driver can save you hundreds or even thousands of dollars through the years.

Demographics

Age is likely to be a part of the assessment (in California, years of driving experience are considered instead of age) as drivers younger than 25 and those older than 65 years old are shown to be involved in more accidents. Gender is also associated with risk, as men are statistically more likely to get into accidents than women. Married adults are seen as lower risk because they have a family to be responsible for, so carriers associate it with more careful driving.

Credit-based Insurance Score

Your Credit-based insurance score is similar to your credit score, but includes different factors in its calculations. In states that allow this, the company may use some of these to calculate your credit-based insurance score: payment history, debt, length of credit history, types of credit you have, etc. Insurance companies have seen the correlation between lower credit scores and risky driving behaviors, so this could be a factor in calculating your auto insurance rates, but not in all states.

Location

Not surprisingly, insurance companies will also include in the risk assessment the locations of your car. First, they want to know how much you drive; the higher the miles driven the more likely you would be involved in an accident. Second, the accident frequency in your neighborhood is also considered; more traffic often means a higher risk for a collision. Third, the crime rate of your neighborhood is also considered as vandalism and theft risks are higher.

How AIS Can Help Lower Your Auto Insurance Rates

By comparing auto insurance rates with AIS, you are able to see the lowest rates amongst 30+ of our partner insurance carriers, including Mercury Insurance, Progressive, Arrowhead, and Workmen’s Auto Insurance Company. Whether you have a red car or a blue one, let us help you find the right coverage at the best price available to you. Get a quick online quote or call AIS at (888) 772-4247 to talk to an Auto Insurance Specialist today and start saving money.

The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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