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The Red Car Bias: Why Michigan Auto Insurance Firms Say It’s Not True

Posted on: Wednesday, October 1st, 2014

Statistics show that red cars account for roughly 1/10 of all vehicles on U.S. roads. There aren’t a lot of them, but psychologists have noted that their owners tend to be the “go-getter types”. These personality types tend to project power and can attracting the attention of other motorists on the road.

Does it cost more to insure a red car

Unfortunately, as some stories go, it also attracts tickets.

Long associated with flashy sports cars, the color red has come to symbolize speed, recklessness, and general “trouble-making” on the road. In fact, according to a recent survey by insurance information website Insure.com, almost half of car owners do believe red cars get pulled over more often for speeding.

The color red draws your attention and the expectation is that auto insurance providers will charge increased rates because of it. After all, safety is a basic consideration in determining insurance rates. Typically, the riskier something is, the higher the insurance premiums will be.

The problem is that for all these theories regarding the color red and its link to traffic violations and insurance rates are unfounded and unsubstantiated. In fact, this urban myth has already been repeatedly debunked, with various studies confirming that any other car color is, in fact, just as prone to accidents or traffic violations.

Furthermore, insurance companies generally find no reason to discriminate against any color, especially because Michigan is a no fault state. In Michigan, for example, drivers pay the Michigan Catastrophic Claim Association (MCCA) an annual assessment fee of $186 per insured vehicle (effective until June 30, 2015). The MCCA is a state fund used to pay for large auto claims.

The fund pays for medical claims over $530,000 under the Michigan no-fault insurance system. In short, when it comes to Michigan auto insurance policies, the policyholder receives the full amount of the loss and the insurer gets reimbursed for the excess coverage. The color of the vehicle has no bearing on this.

Insurance agencies like Allied Insurance Managers, Inc. offer quality car insurance in Michigan. While car history reports may describe a car’s color, insurers are more interested in its make and model, as well as the insureds driving record.

 

(Source: Does it cost more to insure a red car?, The Columbus Dispatch, October 24, 2014)

Paul W. Kosmal

Senior Account Executive at Allied Insurance Managers, Inc.
Paul received a BBA from Western Michigan University, majoring in their renowned Sales and Business Marketing Program. Paul has also attained three prestigious Insurance Designations, Certified Insurance Counselor (CIC), Licensed Insurance Counselor (LIC) and Certified Professional Insurance Agent (CPIA)

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