insurance

Is there a link between insurance premiums and the colour of your car? Images by unsplash, needpix, and publicdomainvectors

Is insurance cheaper for cars with specific colours?

Some South African insurance companies take into account the colour of your car when calculating your premium.

insurance

Is there a link between insurance premiums and the colour of your car? Images by unsplash, needpix, and publicdomainvectors

Some insurance companies in South Africa still consider car colour when determining premiums. Certain colours result in higher premiums. Why does colour impact your car insurance premium?

Is considering car colour for insurance premiums an outdated practice?

According to insurance expert Ismail Canfield, using colour as a factor in determining car insurance premiums is an old-fashioned method. However, some insurers still use it as a determining factor in premium costs. As a broker, Canfield deals with a range of South African insurance companies. He stated that some of these use old methodology, while others use newer methodology to determine premiums. Therefore, in some cases, the colour of a vehicle will impact premiums, and in other cases, it will not.

It seems that generally it is the bigger insurance companies that still use the factor of colour to determine premiums.

Discovery Insure CEO Anton Ossip said that most insurers do not consider the colour of your car when calculating the premium. The Head of Auto & General Insurance, Ricardo Coetzee, on the other hand, said that ‘the colour of your car can definitely affect your insurance premium’.

Why does colour matter?

There are two main reasons why some insurers consider the colour of a vehicle when calculating insurance premiums.

Firstly, the cost of the paint and, consequently, the cost of repairing the vehicle should it be involved in an accident is a main consideration.

According to Old Mutual Group’s underwriting team, certain paint colours cost more. For example, white is a standard/base colour and will, therefore, cost less in comparison to say, yellow. Metallic paint is also generally more expensive to repair than non-metallic (solid) auto paint.

Secondly, many insurers argue that darker colours are less visible on the road, especially at night. Therefore there is a higher risk for accidents to take place.

Some argue that grey or silver cars are less visible, especially on cloudy days, as there is little contrast between the vehicle and its surroundings.

If car colour is not considered, what is?

Insurance companies that use newer criteria when determining premiums, typically do not consider the colour of a vehicle as an influencing factor. Rather, they look at factors such as the driver’s age, the model of the vehicle, and the driver’s claims history.

Canfield said that some insurance companies started using a body-to-power ratio of the vehicle to determine the premium.

Another factor that most insurance companies consider important is safety features.