Does the color of a car affect car insurance rates?

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

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Reviewed byBrad Larsen
Licensed Auto Insurance Agent

UPDATED: Mar 13, 2020

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While a flashy red convertible or bright yellow Ford Mustang will surely bring more attention to you from law enforcement car insurance companies pay less attention to color than you think. Car insurance companies use a number of factors to quantify your risk factor when it comes to the type of car insured. Auto insurers are interested primarily in items such as:

  • Make and Model
  • Age of the Car
  • Engine Size
  • Replacement Value
  • Safety Features
  • Anti-Theft Devices
  • and more

Most car insurance companies pay little or no attention to the color of the car since statistics do not show any particular color corresponding with higher risk of drivers filing a future claim. How the color of a car affects car insurance rates is basically an urban legend and really has nothing to do with car insurance rates.

Will the color of car ever affect car insurance rates?

Now this is very interesting since many people never thought credit scores would ever play a role in calculating car insurance premiums. No one can ever say what factors will always be used to determine car insurance rates since auto insurers employ vast teams of actuaries who run data and test for correlation between practically any variable and risk. While it is possible to say that one day the color of a car may correspond to higher car insurance rates its not a foreseeable event.

What are the main factors car insurance companies use to calculate risk?

Most of the variables used to calculate auto insurance premiums are based on 2 factors – the type of car insured and the driver. Good drivers who have three or more years of a clean driving record, have been licensed for 5 or more years and wish to insure a pretty common car usually fall in the preferred risk category. High risk drivers or owners of extremely rare cars (such as the Bugatti Veyron) often need specialized car insurance.

What is car insurance risk?

Many drivers believe risk to be solely based on driving skills but your driving record is only one factor. The word risk in the car insurance industry is not about the odds of you causing an accident but the overall risk of you simply filing a future claim. Whether that means a cracked windshield, auto theft or a minor accident – its simply about whether or not the car insurance company has a risk of losing money by insuring you.

Car insurance is rather cheap when you think about it. Most drivers average around $1,500 a year in premiums so its easy to see how car insurance companies can lose money quick by insuring the wrong type of profiles.

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