via Moak: Does it cost more to insure a red car?, clarionledger.com.
Bankrate.com sends out a lot of news releases. Almost daily, the website puts out news related to the financial industry, including many about insurance. One factoid sent on Monday caught my eye with this headline: “44 percent of Americans incorrectly thinkdriving a red car affects your insurance payments.” Included was a link to a study conducted by Princeton Research.
“Really?” I thought to myself. “How could anybody think the color of your car has anything whatsoever to do with your insurance rates?” But it’s true; ask around, and a significant percentage of people think red cars cost more to insure than others. If this research is accurate, nearly half of Americans believe this, and younger drivers (18-24) are even more prone to believe it. So, for some advice, I asked my friend (and insurance agent) Mark Doiron of Allstate.
“The auto insurance premium rating on a vehicle is based on the year, make, model and price of car, as well as limits of personal liability, deductibles and safety features such as air bags and anti-lock brakes,” he noted. “Color of the vehicle doesn’t affect the vehicle rating.” He added that other factors can also influence the rate, including driving experience, tickets, accidents, the driver’s age, distance to and from work and school, and whether the vehicle is being driven for business. Various discounts can also come into play, he added, but must be earned.
The origin of the “red-costs-more” myth is murky, but it can be reasonably inferred that, since red is often the color of iconic sports cars, and red is associated with risk-taking, that conclusion might make sense if you didn’t know the facts.
Now, of course that bright red Ferrari driven by Tom Selleck in Magnum P.I. would cost more to insure; not because of its color, but because its cost. And people who drive snazzy red sports cars might get tickets slightly more often, simply because more of those vehicles are likely to be red in the first place, and being behind the wheel of that vehicle might make you take more chances on the road. (Actually, an Australian studyfound that black vehicles are more likely to be in a daytime crash than other colors; the study suggested this had a lot to do with the visibility of the vehicles.)
The Bankrate.com study contained some more insurance-related myths. Here are a few:
- Car insurance doesn’t cover you if a crash is your fault. If you have only liability insurance, you would only be covered for damage caused to the health or property of others. But collision coverage will kick in in an accident, regardless of who’s at fault. This distinction causes a lot of confusion among the insurance-buying public; it’s a good idea to talk to your agent to make sure you understand what’s being covered and what’s not.
- Auto insurance pays for mechanical repairs. Younger consumers, especially, were more prone to believe this. But unless those repairs are the result of a covered accident, you’re on your own if you need to get a tuneup or to replace your brakes.
- Car insurance covers belongings stolen from your car. This is one of the more pervasive myths, but actually, your homeowners’ or renters’ policy would be the one to pay if you’re the victim of a car burglary.
For the complete list of myths, visit http://www.insurancequotes.com/auto/common-car-insurance-myths-92115.