Does your car insurer discriminate by your car colour?

Does your car insurer discriminate by your car colour?

September 22, 2010

RateCity’s car insurance myth buster series reveals the truth about a range of common myths associated with car insurance.

Most people believe that red cars go faster, white cars are easier to see and black have poor visibility, especially at night. But when it comes to insuring your car, does the colour of your car affect the price of your premium?

Myth No.3: The colour of my car affects the cost of my premium.

True. According to research by RateCity, the colour of your car can affect the price of your premium for comprehensive car insurance. However, this depends on which car insurance company you choose as some such as Budget Direct and Virgin Money, don’t ask for the colour of your car when applying for a quote, while others do. Of some of the ones that do ask, the difference in price between each colour is significant.

Put colours to the test

To test this myth, RateCity compared comprehensive car insurance quotes for a white, red and black car from Youi, NAB and Allianz using the same driver profile of a 30-year-old single male living in Sydney’s north-west who drives a 2005 Toyota Corolla.

The results showed that out of the three colours, white cars were the cheapest to insure and black cars were the most expensive overall. Red and black were on par in the price stakes for two of out the three car insurers, with one proving it costs more to insure your car if it is black.

For instance Youi offered the cheapest quotes overall but they also had the biggest gap in price between a white and a black car, with a difference of almost $113, compared to NAB and Allianz who both had an average of $30 difference.

According to Youi the difference in price is due to the fact that darker coloured cars tended to be involved in more accidents, especially at dusk. This doesn’t mean that painting your car white will mean you’re a safer driver, it means that in comparison to other colours white stands out more and is seen to be less of a risk than darker colours.

Save on your car insurance regardless of colour

While the colour of your car may have an effect on the price you pay for your comprehensive car insurance you may still be able to save. For instance, when comparing the lowest and highest quotes, there was a price difference of $187 for white cars, $194 for red and $107 for black.

Compare car insurance quotes online to find a policy offering a premium with a lower price, regardless of what colour car you have.

 

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Learn more about car insurance

Does the colour of your car affect your insurance rate?

You may be surprised to learn that you may want to consider choosing the colour of your car based on your insurance premium, and not your favourite colour. Research from Monash University back in 2007 has shown that the colour of the car could affect the likelihood of a crash and hence some colours could attract higher car insurance premiums than others.

Statistically, silver and grey cars have demonstrated a higher crash risk as compared to say, white cars. This could be because these colours have lower visibility on roads as compared to other colours. The colour orange is deemed a safer bet than white, as are shades of cream, yellow and mauve, although the difference in their premium pricing is not as significant.

Additionally, some colours and paints, especially metallic or pearl shades, can be expensive and cost more to repair or replace. These colours could also affect the value of your car and may raise its cost to a certain degree.

Besides the likelihood of being involved in an accident and the cost of repainting, certain colours also pose a greater chance of being stolen. On average, a green car costs less to insure than a black one since data has shown that black cars are more likely to be stolen than green ones.

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you claim insurance for car dents?

Car insurance has been designed to protect you from some of the costs of repairing damage to your car. However, is it worth claiming car insurance for a dent?

The main factor to take into account is the excess that you will need to pay at the time of making the insurance claim for the car door dent, and comparing it with the repair cost of the dent.

For instance, if someone collided into your car with a shopping cart and the cost of repairing the dent is lesser than your excess, you would be better off not making the claim. However, if your car’s panels are dented by intense hail, in all likelihood the cost of getting the dents taken care of will be much higher than your excess. Here making a car dent insurance claim would make sense.

Please note that if you’re making a car dent insurance claim for damages that have accumulated over a long time, you will be required to pay an excess for each separate incident that dented your car.

 

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

How to choose car insurance?

With so many types of car insurance out there, it can be a challenge to choose the right one for you. Factors to consider when choosing car insurance include the cost, the inclusions, and the benefits of each, which may vary from provider to provider. When choosing a car insurance company, spend some time comparing what is, and what isn’t, covered by the policies.

Compulsory third party (CTP) insurance is part of your car registration cost. However, CTP does not protect you against damage to your car if it’s written off after an accident or if it gets stolen. Moreover, you might have to pay for damages to someone else's property in case of an accident.

Other covers you may wish to consider are third party property insurance, third party property, fire and theft insurance, and comprehensive insurance. While you might want to get additional insurance, not everyone requires the highest cover, and it depends entirely on several factors, such as the make and age of the car or the area where you live.

You can compare car insurance providers to get a policy that suits your needs.

Does car insurance cover contents?

Thousands of vehicles are stolen each year, but insurance can protect you from financial loss.

A common question you may have is what does my car insurance cover? This depends on the type of insurance and there are four basic types of car insurance, and each offers different cover.

 

Types of car insurance

Compulsory third-party (CTP) insurance indemnifies you against liabilities arising due to personal injuries to another party. A third-party fire and theft insurance policy covers loss to your car or third-party property in an accident. It also covers expenses if your vehicle is damaged in a fire or stolen. Third-party property insurance covers any liability resulting from damage to third-party property but any damage to your property is not covered under this policy.  Comprehensive policy covers most costs arising in case of an accident to either your car or third-party property.

 

Does car insurance cover stolen contents?

Does car insurance cover contents lost in case of a theft? Generally, any valuables stolen from the vehicle, such as your phone, are not covered under car insurance. However, some insurers offer vehicle contents insurance that does cover the loss of valuables from your car.

Consider reading your policy’s product disclosure statement (PDS) to find out if it covers contents, or contact your insurer directly.

Remember, there are several ways in which you can prevent theft of both your car and contents. Being a little more cautious can make a huge difference.

Can I get a refund on car insurance?

Have you decided to cancel your car insurance policy? Maybe you’ve sold your car, or you found a better rate elsewhere.  Perhaps you’re just not driving it anymore. So what happens to the unused amount of your car insurance? Can you get a refund on unused car insurance in such a scenario?

It often depends on who cancelled the policy: you or your insurance provider. If you initiated the process of cancellation, then you may be able to get most, if not all, of your unused amount. There might be some cancellation fees involved.

However, if the policy has been cancelled by your provider, because you defaulted on a payment, then you will not receive any refunds. Keep in mind, sale of your vehicle, or traffic violations such as receiving too many speeding tickets, or being charged with reckless driving, are not reasons to withhold refunds.

If you pay your insurance monthly, your future payments will simply stop. However, many insurance policies are paid upfront for the year, as some companies offer discounts. If this is the case, get in touch with your insurer about getting a refund for the unused amount.

Can I get car insurance after an accident?

Buying car insurance after an accident will cover you for future accidents, but won’t cover you for the accident you just had.

Having an accident is also likely to affect your future premiums.  How much is car insurance after an accident likely to cost you? That often depends on the cause of the accident you had and who was at fault. If you were not at fault, it shouldn’t affect you greatly. If you were, the price of car insurance is likely to rise as you’re considered a bigger liability by the insurer.

When buying your car insurance policy, consider asking your insurer how much does car insurance go up after an accident.

The circumstances of the accident can also affect your ability to buy car insurance. If the accident was caused by your reckless driving, your insurer may even cancel your car insurance policy for violating its terms. This may require you to buy a new policy urgently or run the risk of being underinsured. Remember that not reporting a serious at-fault accident to your current or future car insurance provider can also result in such cancellation if the insurer later finds out about the accident.

Can you get same-day car insurance?

While you can buy car insurance the same day you purchase a vehicle, coverage may not take effect immediately, and you need to make sure you aren’t driving around without an active car insurance policy. This can happen if the insurer insists that your vehicle needs to be inspected before they approve the policy. When purchasing a new or used car, you will need compulsory third-party (CTP) coverage before you can drive it. Usually, CTP coverage is included with your car registration. However, in some states, you can choose to buy it from an insurer licensed by the state or territory to offer CTP coverage. Consider checking whether you should buy this policy before registering the car.

Given that you can buy a car insurance policy online, getting the policy may only take an hour or two if you’ve done your research. You may want to ask the insurer about any waiting periods they may place on coverage. For instance, if you’re buying third-party fire and theft insurance just before the bushfire season, the insurer may not allow you to file a fire damage insurance claim anytime soon. Many insurance providers will let you decide the date on which your coverage becomes active. This may be useful if you’re about to buy a car and want to match the date the insurance coverage becomes active with the day you plan to register your car.

Are stolen car keys covered by insurance?

Having your car key stolen is not just frustrating, but it can also turn out to be quite a costly affair. Modern electronic keys can be much more expensive to replace than traditional ones, and losing one can make a sizeable dent in your pocket. But does insurance cover stolen car keys?

A few comprehensive car insurance and third party fire and theft policies do cover lost car keys as a standard, while others offer it to their customers as an extra. However, there are some that don’t entertain stolen car keys insurance claims, so you must check with your insurance policy provider and read the Product Disclosure Statement carefully before purchasing the policy.

It is important to note that you will need to prove to your car insurance provider that the keys have actually been stolen and not merely misplaced, as most policies will refuse to provide cover in the case of lost keys. Car insurance policies that cover stolen keys typically cover the cost of replacing the keys, recoding your car locks and locksmith charges.

 

Can I have two insurance policies on one car?

Everyone who drives a car in Australia must have insurance. If you were found driving without insurance, you’d likely have to pay a big fine go and may even have to go to court.

Having said that, there’s no need to have two car insurance policies at the same time if both cover the same thing.

You may get different policies for comprehensive or third party damage and compulsory third party, but usually there’s no need to have different policies for different drivers. Insurers should cover multiple drivers for the same car.

There are some instances where you may accidentally have two of the same car insurance policies. For example, if one policy has automatically renewed, but you sought insurance elsewhere without realising. If the question is, can a car have two insurance policies legally? The answer may technically be yes, but again, having two separate insurance policies for the same vehicle is not recommended.

If you do have two policies and are involved in a car accident, you cannot file claims with both insurance companies to get a financial windfall.

Does my car insurance cover water damage?

There are many types of natural disasters that affect Australia and if your car is in the wrong place at the wrong time, it could get damaged. The right insurance policy should protect you from loss if your car needs to be repaired. Comprehensive car insurance packages cover certain types of water damage. However, it depends on what caused the damage.

Under certain policies, your car may be covered for water damage caused by flooding, heavy rain, and hailstorms. Your car’s exterior, interior, and engine are typically covered against these natural disasters under comprehensive policies.

However, comprehensive cover does not usually pay for any internal water damage caused by a maintenance issue, such as a window or sunroof left open during a rainstorm or an ignored slow leak. Leaks that are a result of heavy rain might be covered given it’s possible that your car has some imperfections like bad sealing on the windows, doors, or sunroof.

To ensure that you can claim water damage car insurance, follow these car water damage insurance claim tips: 

  • Get slow leaks repaired as soon as they emerge;
  • Ensure that windows or the sunroof are never left open when the car is not in use.

Can you register and insure a car without a license?

Yes, it is possible to buy, register and insure a car without a driver’s licence in Australia. While most states and territories have different rules regarding car purchase, some states may allow this. However, it is important to note that you won’t be covered if you’re driving the car and you are involved in an accident.

The reason people consider taking out cover on their car even without a licence is to protect the car against theft, vandalism and fire. If someone else regularly drives your car then also you may wish to insure your vehicle. Ensure that you list this driver on your policy, else you might end up having to shell out money for an unlisted driver excess in the event of a claim.

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.