The latest debate on the car insurance scene is whether or not your vehicle’s colour affects your monthly insurance premiums. Discovery Insure CEO Anton Ossip was quoted as saying, “Most insurers have very little interest in the colour of your car.” However, the Head of Auto & General Insurance, Ricardo Coetzee, disagrees, “The colour of your car can definitely affect your insurance premium.”
So, who’s got it right?
The truth lies somewhere in between.
Content:
Brighter colours are known to affect one’s ability to resell the car. But what about insurance?
Myths such as red cars leading to aggressive driving continue to persist, but there’s no factual data to back up this claim. Some of the world’s smartest minds have done extensive research and completed statistical analyses that have failed to find a correlation between vehicle colour and driving behaviour or risk.
That said, the car’s colour can affect your premium, but not in the way you think.
The car’s visibility affects your chances of being in an accident.
In other words, black, navy blue and other darker-coloured vehicles are a bit more expensive to insure, given that they’re harder to see on the road, especially in conditions with reduced visibility.
Plus, these colours have a statistically higher chance of being in an accident and written off.
Now that we know what insurers don’t look at, what about the things they do consider when calculating premiums?
Factors including the car’s make and model, the main driver's insurance history, parking location, the car’s use (whether personal or business use) and driving habits are what really matters. And, of course, the vehicle's safety features, the cost of repairs, and the likelihood of theft are also crucial considerations.
Your premium price also depends on the type of coverage you opt for; comprehensive, third-party only or third-party fire & theft, with the first option being the priciest.
Insurance premiums may also increase if the risk increases–for instance, you claim after an insured event.
There are stigmas surrounding a car’s colour and what effect that has on a driver’s behaviour on the road. As previously mentioned, red cars are associated with reckless driving and are even said to result in more than their fair share of speeding tickets.
We don’t know about all that.
But, research has found that all drivers are more likely to experience “physiological arousal” when they see the colour red, especially in the context of perceived misconduct.
The association of red with emotions like anger and aggression probably gives rise to this finding.
However, colours like blue and green are said to have a calming effect. Let’s look at some other colour-coded behaviour:
So, the main takeaway is that colour can affect perceptions on the road more than it does your insurance premiums.
Echoing earlier statements, Dialdirect’s head of product, Anneli Retief, says, “The main [reason] why the colour of your car can impact your insurance premiums [pertains] to the visibility of the car at night and paint costs.”
This sentiment is shared by Old Mutual Group’s underwriting team, who listed the following reasons:
Could the above reasons be why we see so many white cars on South African roads? That, and cars must be visible during unscheduled power failures and load shedding, we suppose.
Other colour-related costs to consider are alterations to the original paintwork, like wrapping a vehicle or a custom paint job, which will also likely impact the premium.
A 2007 study by Stuart Newstead and Angelo D’Elia at Monash University’s Accident Research Centre examined the relationship between vehicle colour and crash risk. Like Anneli Retief’s statement, the analysis determined that “[compared] to white vehicles, a number of colours were associated with higher crash risk.”
The study went on to clarify that these other colours, namely red, black, blue, silver, green and grey, ranked low on the visibility index.
However, a disclaimer stated that the results also suggested environmental factors can modify the relationship between a car’s colour and crash risk. Further research is needed to quantify this claim.
Elsewhere, in the insurance industry, companies and other providers use data-driven insights to adjust premiums, but car colour is generally not a significant factor.
Insurers consider trends; information could be insightful if analysis reveals that certain hues are statistically more likely to be involved in accidents.
To sum it up, we're not opposed to standing out on the road; however, the next time you think about getting a new car in black or *some other fancy colour ("Pigeon Grey", "Truffle Mica", "Blu Nettuno"... the list is endless), keep the above in mind.
But, if you can pocket the costs, then by all means, go forth and prosper.
*A list of some fun colours:
Insurance regulations vary globally, with some being region-specific. Still, their core modus operandi (m.o.) remains the same and is rooted in fairness, transparency, and non-discrimination.
As mentioned, regulators mandate that insurers determine premiums using factors directly related to the insured risk.
This is to curb discriminatory practices from arising.
So, insurers must have clear and empirical evidence that a car's colour significantly impacts risk before considering it.
Insurers must also disclose how they calculate premiums and be able to justify their risk assessment models to regulators. If vehicle colours were to affect policy premiums, the insurance provider would need to provide substantial and concrete evidence supporting its relevance to risk assessment.
However, it’s vital to remember that the insurance industry is subject to evolving regulations, especially as new technologies and data analytics capabilities emerge.
So, regulators would need to continuously review and update guidelines to ensure they remain relevant and effective in protecting consumers and promoting fair practices.
Save yourself the trouble of swapping your cherry-red cruiser for a modest white whip; there are better ways to save on your monthly insurance premiums.
For starters, focusing on factors within your control, like maintaining a clean driving record, can lead to significant savings. Are you still looking for more ways to minimise your premiums? Here are some practical steps you can take.
Focusing on these controllable factors can help you reduce your insurance premiums effectively while ensuring you have the coverage you and your car need.
“This research employed a stratified induced exposure study design, which helped in identifying vehicle-to-vehicle crashes and crashes involving unprotected road users, where the risk was dependent on vehicle colour. The analysis was stratified by vehicle type, light conditions, and jurisdiction of the crash, and it identified a statistically significant relationship between vehicle colour and crash risk. The study suggested that white or light-coloured cars are less likely to be involved in a crash compared to cars of other colours.” – Tumisang Tshikare, Pineapple Data Scientist.
In our case, this accounts for about 2-5.2%, give or take of the premium, which is very little compared to other factors.
Pineapple has many ways it can influence premium through colour; for example, we can use telematics data to assess the extent to which each user uses their car at night time and use that information to adjust the premium accordingly.
With our data, a white car might have a premium that is 1-3% less than a dark-coloured car would be.
But this highly depends on the risk or how stable the risk of the user is; for example, non-risky users will be less impacted on their premium by the colour of their vehicle, eg a fast black car will be more impacted than a fast white car, as opposed to a normal white car and a normal black car.
This was our long-winded way of saying that while colour can affect insurance premiums, the effect is negligible.
Despite myths that continue to persist, extensive studies and industry insights confirm that car colour is generally a non-factor in risk assessment. Instead, insurers weigh factors like your car's make and model, driving history, and safety features. These factors make up your risk profile.
Understanding these key elements, instead of fixating on hues and shades, can help guide you to making more intelligent, more cost-effective insurance choices.
Secure peace of mind on the road ahead — Get your quote today and drive with confidence!
Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
References:
We post a lot of nonsense. Some of it’s even about insurance. Give us a follow. There’s a 43% chance you might actually enjoy yourself.
4 Sandown Valley Crescent,
Sandown, Sandton, JHB
hello@pineapple.co.za
complaints@pineapple.co.za
060 012 3771