How Does Your Car’s Colour Affect Its Insurance Rate?

Posted on: Dec 1, 2022 | | Written by:

How Does Your Car’s Colour Affect Its Insurance Rate?

Published on November 30, 2022. EST READ TIME: 4 minutes

The colour of your car does not have any direct impact on the car insurance price. Here are the two most popular types of car insurance policies and the impact of colour on them.

A.Third-party liability:

Third-party liability-only policy is a fundamental policy that offers protection against damages or injuries to other individuals or vehicles during an accident. The IRDAI regulates the policy premiums for the third-party liability policy. And the premiums are based on the engine capacity of the car. Thus, the colour of your car does not have any direct impact on the policy premium.

B.Comprehensive car insurance:

During the process of buying a comprehensive car insurance policy, insurance providers usually do not ask about the colour of your car. In fact, they rely on other information about the car, such as its engine capacity, the age of the car, the manufacturer, and the model that you have opted for. Thus, your car’s colour does not directly influence the policy premiums. But it can have some indirect impacts.

When does the colour of your car affect its premiums?

There are a few possible scenarios where the car insurance price is dictated by the colour of your car. Here are a few of them.

1.Custom paint:

A lot of car enthusiasts like to modify their cars. And the modifications can either be aesthetic or performance oriented. If you want to apply custom paint on your car, it will almost certainly increase the worth of your car. This, in turn, can increase the cost of repairs in the future. Thus, insurance providers might charge you a higher premium for a custom paint job. This also applies if you use graphics that can be expensive in some cases.

2.Demand:

The process of buying a car can be a lot of fun, with several models to test drive and several feature lists to go through. Once you have finally decided which car and model to buy, the next big decision surrounds the colour of the car. You might be confused between two colours, let’s say blue and red. With no other differences between both cars, the only point of consideration is long-term maintenance and insurance premiums. Despite both cars being exactly the same, one of them might have a higher demand. It is usually seen that red cars have higher demand than other colours. This higher demand can result in slightly higher prices. And a higher price tag on the car translates to a higher premium amount. Thus, the car insurance price for a red car can be higher than for a blue car or other colour cars. It is also possible that the demand for blue cars can increase in the future, which would increase its valuation and insurance premiums as well. Similarly, if you choose a car whose paint scheme is the least popular, its premium can be a bit lower than other models since the least popular colour has a lower risk of being stolen.

What to do if there are any changes to the car mid-term?

Car insurance policies usually are issued for a year. And you must renew the policy before its expiry, or else you might face some consequences. Failing to renew the policy online might lead to policy expiry. And if you renew expired car insurance, insurance providers might even ask for physical verification or a self-inspection video of the car, apart from losing your no claim bonus.

In the likely scenario that you make changes to the car, such as opting for an expensive paint job or a custom paint job during the policy term, what should you do? Here are some easy steps to follow.

●It is crucial to inform your insurance provider about the paint job or modification at the earliest since modifications can impact the car’s valuation and, thereby, its policy premiums.

●It is possible that there might or might not be any changes to your policy post the modifications. However, not informing the insurance provider can lead to claim rejections on similar grounds.

●When you inform your insurance provider about the modifications, it is likely that they might ask for evidence in the form of photos and videos. Make sure to provide them with the necessary evidence.

●Should the modification warrant a change in the policy premiums, your insurance provider will accommodate it with the existing policy via an endorsement. Once you complete the payment of the premium, you will receive an updated policy document.

Important reasons to renew your insurance on time:

There are more than a few reasons for you to renew the policy before its expiry. Though you can renew expired car insurance, it is an area you would not want to venture into. And here is why.

1.Legal consequences:

Driving with an expired car insurance policy is illegal. It not only puts you at risk of being caught by the traffic police but also against any legal issues arising in the case of an accident involving other vehicles.

2.Liabilities:

In the case of an accident with other vehicles, the onus of paying for the damages is on you. However, that is not the case if you have valid insurance on you.

3.Continue with benefits:

A car insurance policy can offer a lot of benefits and coverage. If you fail to renew the policy on time, you will miss out on these benefits. You will also risk losing out on any no claim bonus that you might have accumulated.

4.Grace period:

Though insurance providers offer a grace period when you can renew the policy, your car will not have any sort of coverage during that period. If there are any damages to your car during this period, you cannot make any claims.

5.Car Inspection:

Should you fail to renew the policy before its expiry, it can lead to a car inspection by the insurance provider on policy renewal. This can be a bit time-consuming and leave your car without any coverage for some more days.

6.Higher premiums:

Insurance providers might charge a higher premium for comprehensive car insurance policies if your previous policy has expired. Again, another inconvenience that can be easily avoided.

Conclusion

The colour of your car while does not have any direct impact on your car insurance price, but it does have indirect impacts. If you opt for a custom paint job or opt for a model that is in high demand, these can result in a higher valuation of the car, which in turn affects the policy premiums. It is important to note and inform your insurance provider about any modification that you are doing to the car, as not informing them can lead to claim rejections.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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