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 with certainty that red cars are more expensive to insure by some seemingly all-knowing individual. It may be a common belief, but is it true?

I guess the thinking is that all the fastest, coolest cars on the market are red. The Ferrari poster on my wall as a kid seemed to back up the statement.

But is it actually true? Do insurance companies charge a higher insurance premium for red cars? Let’s find out!

What’s the verdict on red cars?

• Red cars aren’t more expensive to insure and in fact color shouldn’t even be a major factor when looking into coverage costs.
• Vehicle color is not one of the many rating factors used to calculate your car insurance premium.
• Focus on your driving habits and the make and model of the car instead.

The short answer is NO, red cars do not cost more to insure than other cars, all else being equal.

This is actually one of the most common insurance myths out there today. Red is a popular car color, but will not actually raise the cost of coverage, though it may look a little flashier.

Knowing the basics of how insurance companies determine premiums will shed some additional light on the subject, but we can tackle the rest here.

Simply put, insurance companies do not consider vehicle color as a rating factor. So it doesn’t matter if the car is silver, white, black, beige, or purple. Red is not considered a ‘dangerous color’ to have a vehicle painted.

However, there are certain aspects of your vehicle, and you, the driver, which are taken into consideration when determining what you’re going to have to fork over for coverage.

How does your vehicle matter aside from color?

• Car insurance companies care about the year, make, and model. For example that it’s a 2019 Ford Mustang GT and not that’s it a red Ford Mustang GT.
• The brand, model, and age of the vehicle will dictate the price of your premium

What insurers are concerned with here are the make, model and year the vehicle was manufactured.

These three unique identifiers make up what is referred to as a vehicle’s ‘symbol’.

Insurers use symbols for groups of similar vehicles as a means to make their rating structure easier.

In short, the higher your vehicle’s symbol, the higher the insurance premium, all else being equal.

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. There are always higher financial levels of risk with pricier cars.

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, not a penalty for driving a luxury vehicle.

The year your car 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 altogether.

[What’s the difference between collision and comprehensive coverage?]

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.

Tip: Having both liability and physical damage coverage is referred to as full coverage auto insurance.

How do you, the driver, matter? 

• While vehicle color doesn’t factor into car insurance pricing, one could argue that most sports cars happen to be red. It’s a pretty common color.
• Sports cars are generally the most expensive vehicles to own, which means the associated car insurance premium could be higher, especially if they’re being driven by more aggressive drivers.

We’ve already discussed physical damage, but what about 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. This is where you as the driver come in.

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. Not to mention the driving record of said driver. If you’re a teenager who has already been in a few accidents, you’re going to be facing some seriously high individual rates.

Following the speed limit, paying attention to road conditions, and using all the high-tech safety features that hopefully come with your car, are all ways you can be a low-risk driver. Aggressive driving is going to land you nowhere but in a higher payment bracket. No more blaming your accident history on the color of your car – the truth is out there. It all comes down to how you drive.

What’s the bottom line?

So how does paint color factor in here? Well, some argue that most sports cars are red, and because sports cars are often 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. Distracted driving runs a higher risk of accidents occurring, which means that it’s the riskier driver who’s looked at, not the car, and certainly not the color.

So if it is indeed more expensive to buy car insurance for a red car, it is only for indirect reasons such as a high-risk driver behind the wheel.

And if you happen to drive a red car and are in need car insurance, don’t fret. You’re not going to get taken for a ride simply because your car is a certain color.

Each state has a Department of Insurance that verifies all car insurance companies are charging a reasonable amount, so you can be sure you’re not paying an inflated or discriminatory price.

As always, it is recommended that you compare insurance quotes online or speak to a local independent insurance agent to ensure you’re getting the best insurance coverage at the lowest available rate.