Do red cars cost more to insure?

Do red cars cost more to insure?

Source: Yahoo

Absolutely Not.

That doesn’t keep people from believing it, though. According to an Insure.com survey done last year, 46 percent of 2,000 licensed drivers believed that red cars are more expensive to insure because they are pulled over more often.

Yet they’re doubly mistaken.

Not only does color have nothing to do with , a particular model’s risk isn’t determined by the number of tickets its owners receive.

Red, blue, silver: It makes no difference

Your insurer could not care less what color your car is.

“We handle dozens of insurers, and not one of them asks,” says Des Toups, managing editor of Insurance.com.

“The color of your car has no bearing on your premiums,” says Loretta Worters, vice president of communications with the Insurance Information Institute (III).

“The color of your vehicle is not even a question on the insurance application, and it is a non-factor,” says  Kristofer Kirchen, president of Advanced Insurance Managers.

In most cases, your insurance company doesn’t even know the color of the car you are driving.

They do ask for your vehicle identification number (VIN) number during the underwriting process, but vehicle color is not a component of the VIN code. A VIN can tell you quite a bit about a vehicle, including where it was built, its trim level and even warranty details, but it cannot tell you or your insurer the color of your ride.

So go out and buy that Ferrari-red sports car. Your insurer will not care, as long as it is not an actual Ferrari.

Tickets don’t matter? Yes and no

Tickets matter when an insurance company looks at your driving record to calculate your individual rates and decide whether you are a .

A single speeding ticket can raise your rates by 15 percent, according to data gathered from six major carriers for Insurance.com by Quadrant Information Services. Two tickets? Nearly 40 percent.

So, yes, tickets do affect rates, but only for the driver who got them.

Insurance companies care far more about claims, which directly affect their bottom line. A car with a high frequency of claims or a record of more expensive claims will be more costly to insure – for everyone who buys that model of car.

“It’s really two separate questions: How risky is the driver, and how risky is the car?” says Toups. (See “ ”)

In neither case is the car’s color a factor.

Whether red cars are more frequently pulled over is harder to pin down. Law enforcement officers say it’s simply not an issue, and certainly a radar gun or speed camera doesn’t know the difference between arrest-me red and rental-sedan white.

Color does matter: The exceptions

The only way paint can be a factor in your insurance rates is if you have a custom paint job, but even that shouldn’t add a ton to your premium.

“Custom paint could increase your rates,” says Kirchen, “It could be considered under additional custom parts and equipment, but there would only be a nominal fee charged for it.”

And while it won’t directly cut your rates, your car’s color may make it less likely to be stolen. In that case, a red car might be an advantage.

According to a 2012 report by CCC Information Services, red doesn’t even register in the top five vehicle colors that are most frequently involved in thefts. Car thieves prefer green, gold, black and white cars, and their No. 1 pick is silver.

Cars that are frequently stolen will also cost more for comprehensive coverage.

So who cares about color? You do

Insurance.com surveyed 1,000 men and women, all married, licensed drivers over the age of 25, asking them what color their car is, and why they chose that color. The top colors were:

  • Black: 19.5 percent
  • Silver: 18.5 percent
  • White: 16.2 percent
  • Blue: 12.5 percent
  • Red: 8.5 percent

The reasons drivers chose their particular color:

  • It was pretty: 31.5 percent
  • No other choice: 25 percent
  • Wouldn’t show dirt: 10.2 percent
  • I look good in it: 9.7 percent
  • It blends in: 7.6 percent
  • It stands out: 6 percent
  • Safety: 5.8 percent
  • Resale: 4.2 percent

The original article can be found at Insurance.com:

Allstate will offer insurance for drivers who pick up passengers through apps like Uber, Lyft

By Marley Jay

THE ASSOCIATED PRESS

NEW YORK — Allstate will start insuring drivers who pick up passengers through ride-hailing apps like Uber and Lyft.

The insurer said Wednesday that the Ride for Hire policy will cost $15 to $20 a year on average and will provide coverage for drivers who get into accidents while they are on the way to pick up new fares. It said it can also help them deal with gaps in coverage between their own auto insurance and policies offered by the ride-hailing companies.

Allstate Corp. will offer Ride for Hire coverage in Colorado, Illinois, Texas and Virginia in 2015 and said it plans to start offering the coverage in other major markets in 2016. Companies including Farmers, Geico, and USAA also started offering ride-sharing insurance in a few states earlier this year.

Ride-hailing smartphone apps like Uber, Lyft and Summon can be used to book a ride from a nearby driver. The drivers don’t work for the companies directly, however. Some work for car services while others are using their personal vehicles to make some extra cash.

The issue of how the drivers are insured is complex and has been contentious at times.

Uber and Lyft both provide insurance for drivers while they are carrying passengers, and they offer varying levels of coverage for drivers who have turned on their app, meaning they are available to give rides, and for drivers who are on their way to pick up a passenger. Drivers are also required to keep a personal auto insurance policy. However Allstate said insurance from ride-hailing app companies sometimes has a higher deductible than a drivers’ personal auto policy, meaning a driver might have to pay a larger-than-expected deductible in some circumstances.

Last month Uber temporarily pulled out of Kansas in a dispute over insurance coverage and background checks for drivers. Uber also suspended operations in Portland, Oregon, for several months during a dispute over the same issues and has fought against similar laws in other states.

 

The Self-Driving Car and the Coming Revolution in Auto Insurance

By VALERIE RABURN

Source: The Wall Street Journal

Google ’s new foray into the American auto-insurance market will likely bring in a good chunk of revenue, what’s precious to the Silicon Valley giant is the mass of data it will be able to collect.

In March, the company launched a U.S. version of its Google Compare auto-insurance site, which has been up and running in the United Kingdom since 2012. The U.S. site allows consumers to get quotes from a dozen auto-insurance companies, including MetLife and Mercury Insurance. The rollout is starting with California, but Google says the site will be open to residents in other states soon.

At first glance this appears to be simply another enticing revenue stream for the company. Google Compare aggregates insurance quotes from more carriers than any one consumer could possibly juggle on his own, which will draw shoppers looking for the best deal. Google gets paid each time a user on the site clicks through and buys a quoted policy.

Yet consider how all this sifting of auto-insurance rates will position the company: Could Google turn this revenue-generating learning experience into a more lucrative opportunity to underwrite its own insurance policies and displace traditional carriers—especially once driverless cars become a reality?

Consumers using Google Compare enter their demographic and vehicle information, just as they would to get a quote on the website of a big-name carrier. Google then is able to see—and subsequently analyze—the rates that more than a dozen insurers return to that customer.

This broad understanding of how auto-related risks are priced in the competitive market could allow the company to insure tomorrow’s vehicles, or simply roll the cost of insurance into the retail price of Google’s own driverless car once it hits the market. That’s one way for Google to become the exclusive insurer of its driverless cars, firmly slamming the door on any would-be competitors.

There’s a reason that Google Compare went live in the United Kingdom, where it now presents quotes from 124 companies, before it was introduced here. The U.K has already approved testing of driverless cars on public roads. U.S. regulators are being more conservative, taking time to think through the implications of the new technology.

For example, government representatives and several companies—including Ford, General Motors , Honda, Toyota and Xerox , where I work—have joined with the University of Michigan and the Michigan Department of Transportation to build Mcity, a 32-acre simulated town that will test various types of connected and autonomous vehicles. Mcity, which includes several miles of roadway, roundabouts, crosswalks and other obstacles, is slated to open in July.

It’s not difficult to imagine how driverless cars will change consumer habits and choices. Fewer people will buy cars, as ordering a vehicle from an unmanned car service will be cheap and convenient. In some ways, this will bring the luxury of a chauffeur to middle-class families and convert drive time into bonus time. Google reportedly has invested $258 million in the app-based ride service Uber, which recently announced its own initiative to research autonomous vehicle technology.

All this will upend the auto-insurance market, which has annual revenues north of $150 billion. For one thing, the businesses that own and furnish cars for just-in-time transport will be responsible for insuring them. For another, the accident rate with self-driving vehicles will be but a fraction of what it is today, since human error will be eliminated from the equation. That will push insurance payouts and prices way down. After an accident, the onboard computer and sensors will be able to determine whether it was caused by a poorly designed algorithm or a parts failure.

Since often fault won’t be an issue, auto insurance could come to resemble general product liability insurance, similar to that held by manufacturers of everything from stovetops to trampolines. Hence the opportunity for Google, armed with mountains of data on the evolving market, to confidently bundle insurance into the price of its driverless vehicles.

The bottom line: In the short term, insurance carriers participating in Google Compare might draw consumers away from the big-name players. In the long term, not only could personal auto insurers struggle to stay afloat, but commercial insurers could be muscled out of the market as well if Google—tomorrow’s auto maker—gets into the business of managing what happens when cars collide.

Today’s traditional insurance carriers might want to explore alternate lines of business. The velocity of change over the next 10 to 15 years will be unprecedented. It will be interesting to see how the insurance industry responds.

Ms. Raburn is chief innovation officer of insurance services at Xerox.

Ontario: Hundreds rally against cuts to auto insurance benefits

BY MARYAM SHAH, TORONTO SUN

TORONTO – Changes to auto insurance benefits for motor vehicle accident victims passed in the Ontario legislature Wednesday as part of the provincial budget.

“God help us all,” Tammy Kirkwood said upon hearing the news. “We’re getting a lot less coverage for a lot more money and I’m not sure why.”

Kirkwood was one of hundreds of protesters at Queen’s Park rallying against reductions in auto insurance benefits which they say will have the most effect on victims with catastrophic injuries.

The 47-year-old Orillia woman said protesters were “flabbergasted” that the provincial government “was trying to disable our resources and our funding to recover.”

Part of the changes to auto insurance rules under the new budget mean that combined coverage for medical, rehabilitation and attendant care benefits for the catastrophically injured will be cut in half from its current cap of $2 million to $1 million.

Kirkwood survived a 2008 collision when a dump truck hit her car. She had to be pried free from her vehicle by firefighters, and was deemed catastrophically injured.

She says she was only able to move forward because she had access to the services she needed.

Unable to return to work, Kirkwood now volunteers as an advocate with FAIR Association of Victims for Accident Insurance Reform.

New Democratic Party MPP Jagmeet Singh spoke at the rally in support of their cause.

The cuts affect “the most vulnerable people,” such as people with brain and spinal cord injuries, he said.

“They need benefit coverage … to live an at least somewhat decent life,” Singh pointed out.

A spokesman for Finance Minister Charles Sousa said the government is “working hard to create a fair and affordable insurance system” for the province’s 9.4 million drivers.

Ontario is “the only province in Canada to offer exclusive catastrophic coverage,” Kelsey Ingram said in an e-mail.

“Catastrophically impaired claimants will also continue to be able to sue an at-fault party to recover damages for health-care expenses and potentially other claims,” she added.

The provincial government is also committed to making sure any savings from these changes do not result in “excess profits” for insurance companies, Ingram said.

“This is about lowering premiums while providing support and protection for all Ontario drivers,” she said.

Parents – make sure to plan a safe ride home for your teens this grad season

Parents – make sure to plan a safe ride home for your teens this grad season

For high school seniors, grad celebrations and one last summer of carefree fun and parties remain before they move onto the next chapter of their lives. It’s an exciting time for grads and ICBC is asking parents to make sure their teens have a plan to get home safely from all of their celebrations and parties.

Every day from June to August, 19 youth are injured in crashes in B.C.

The number of youth killed in crashes increases by nearly 30 per cent in July and August in B.C. with an average of 10 youth killed. Speeding, impaired driving and distracted driving were the top contributing factors for young drivers in these fatal crashes.

Top five tips for parents:

  1. Know the plan every time. Talk to your teen about all of their plans for grad celebrations and parties and how they’ll be getting home from each of them. Many grads treat themselves to a limousine – make sure it’s scheduled to drive them home. If they could end up going to multiple parties in a night, make sure they plan safe rides for that too.

  2. Backup plans. Review a few scenarios with your teen in case their safe ride home falls through so they’re prepared and discuss alternatives whether it’s transit, a taxi or calling a family member for a ride. Ask your teen to program local taxi companies’ phone numbers into their phone, look up transit information in advance and set aside money for transit or a taxi just in case.

  3. Call for help. If you haven’t already, consider letting your child know that they can call you at any time if they ever need a ride. If they do call you for assistance, be supportive and consider saving your questions for the next day or at least until you’re home. If you aren’t able to pick your teen up yourself, you can always call a taxi to get them home safely.

  4. Designated drivers. If your teen is going to be the designated driver, remind them that a designated driver does not drink at all and use real-life scenarios to encourage an open discussion about not allowing passengers or peer pressure to influence their choices.

  5. Take a stand. If your teen will be getting a ride with a friend, remind them to ask the driver if they’ve had anything to drink before getting into the vehicle if they aren’t sure. Even if you’re confident that your child is going to make the right choices, talk to them about looking out for their friends, especially those they know are easily influenced by others. Your teen’s choices can have a significant influence on their friends and make it easier for them to take a stand too.

Regional statistics*:

  • On average, 385 youth are injured in crashes each month from June to August in the Lower Mainland.

  • On average, 71 youth are injured in crashes each month from June to August on Vancouver Island.

  • On average, 97 youth are injured each month from June to August in the Southern Interior.

  • On average, 28 youth are injured in crashes each month from June to August in the North Central region.

    Learn more about ICBC’s road safety speakers who have been touring the province sharing their personal, heartbreaking stories to thousands of students to motivate them to think twice before taking risks while driving. You can also find more helpful road safety tips on icbc.com.

*Fatality data based on police data from 2009 to 2013. Injury data based on ICBC data from 2009 to 2013. Youth defined as aged 16 to 21.

 

Media contact:
Lindsay Olsen​
604-982-4759

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