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On average, there are over 6 million car accidents that take place on the roads nationwide each year. This results in insurance companies paying out billions of dollars in claims related to these accidents. To help offset these types of losses, insurance companies will charge higher car insurance rates to drivers who are determined to be riskier to insure. While the average cost of car insurance nationwide is $1,771 per year for full coverage, the drivers who are more likely to make a claim will typically pay more for a policy.
What that means for you is that having just one small at-fault accident or traffic ticket conviction on your driving record can result in more expensive car insurance. Plus, there are other factors, such as the type of car you drive and the area you live, that can have a big impact on your rates. But one common belief is that the color of the car you drive can also have a big impact on the price of your car insurance policy, with red cars being more costly in particular. But do red cars really cost more to insure than other colors of cars? Or is this simply a common driving myth? Here’s what you should know about the cost of car insurance for red cars.
Do red cars cost more to insure?
While many people believe that red cars are more expensive to insure, the truth is that the color of your car has little to no impact on how much you pay for car insurance. The color of your car only matters in that it reflects your personal taste and style.
That’s because car insurance rates are determined, in large part, by how risky each driver looks to the insurance company. A history of at-fault accidents or traffic convictions can make a driver more risky to insure, as there is a higher likelihood of a claim being made on the person’s insurance policy. As such, if a driver is determined to be high risk by an insurance company, it will likely result in them paying more for their car insurance.
What is never part of the equation, however, is the color of the vehicle. It simply doesn’t get taken into account by insurance companies when they determine your rate. So while a history of at-fault accidents or speeding convictions can result in higher car insurance costs, driving a red car will not.
Factors that are used to determine car insurance costs
Each insurance company weighs different factors to determine car insurance rates. Some of the more common factors used to determine car insurance costs include:
- Driving record: If you have a clean driving record, you might be able to get a lower auto insurance premium. If you have a history of accidents, speeding tickets or traffic violations, your premiums will be higher.
- Location: Where you live can have an impact on the cost of your car insurance, and in some cases, the cost difference from one ZIP code to the next can be significant.
- Type of vehicle: Certain types of cars, like performance sports cars or high-value vehicles, are typically more expensive to insure.
- Annual mileage: How much, or how little, you drive can also be used to help determine your rate.
- Age: Younger drivers typically pay higher rates for car insurance due to a lack of experience behind the wheel.
- Marital status: Married drivers typically pay lower rates for car insurance.
- Credit score (in some states): If you have a history of late payments or other credit-related issues, you might pay a higher premium in certain states.
- Gender (in some states): Your gender can also play a role in the cost of car insurance in some states.
The amount and type of coverage can also play a part in the cost of a person’s car insurance. Minimum coverage car insurance, which is the state-required minimum coverage that a driver must carry to legally drive, is typically the cheapest option because it offers the least protection. On the other hand, full coverage policies cost more on average.
Adding additional coverage to your policy can also have an impact on the cost. Adding towing and rental car coverage and other endorsements or add-ons will help to drive up the cost of your car insurance premium.
Your deductible may also play a part in the total cost of car insurance. Choosing a higher deductible typically means lower premiums. That’s because more of the risk is taken on by the policyholder.
Tips for lowering your car insurance premium
While there are a number of factors that determine how much your insurance will cost, there are ways you may be able to lower your car insurance costs, including:
- Shop around: Each company determines their own rates, so the rate you are offered by one company may be quite different from the rate you’re offered by another. Shop around with both local and national insurance companies and get personalized quotes to compare.
- Take advantage of discounts: Discounts can be a smart way to cut the costs of car insurance, and most companies offer at least a few discount opportunities. Ask your company if you qualify for any discounts, such as a bundling discount, safe driver discount or a discount for paying your annual premium in full.
- Adjust your deductible: Raising your deductible can help lower your monthly cost of car insurance. However, it can also be a risky move, so think carefully and evaluate the potential repercussions before doing so.
- Evaluate your policy: Add-ons, like roadside assistance or rental car coverage, can be useful, but these types of endorsements can also have an impact on your premium. If you added additional coverage in the past, evaluate whether or not it’s worth the extra costs.
Frequently asked questions
No, car insurance does not cost more if you drive a red car. This is a common belief, but it’s incorrect. Your car insurance rates are based on numerous factors, like your driving history, vehicle, coverage amount and annual mileage, but your car color does not play a role in determining the price you pay for car insurance.
Based on Bankrate’s analysis of average rate data, the average cost of car insurance nationally is $545 per year for minimum coverage and $1,771 per year for full coverage. The cost of your car insurance will likely differ from the average, though, because car insurance rates are based on a variety of factors, including the type of coverage you select and your driving record.
If you’re looking for the cheapest car insurance options, it may be helpful to shop around and compare quotes to find the cheapest option for your needs. It can also be helpful to evaluate your current coverage to determine whether you’re paying for add-on coverages that you don’t need. You can also check with your current insurance company to see if there are any discounts you may qualify for to help lower the cost of your policy.