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Vibrant car colour? Get ready to shell out higher premium on cover

11 May, 2008

The choice of red colour for your dream car may match your vibrant personality, but you may end up paying higher premium for it due to the poor visibility factor.  Insurers say vehicles with colours like beige, red and blue induce poor visibility during night and are hence, prone to a higher rate of accidents. Therefore, when arriving at the premium, vehicle owners with vibrant colours could end up paying a higher premium due to their higher claims ratio. Insurance companies say these add-on products have been filed with IRDA. From the insurers'' point of view, colours with better visibility-like silver-will be less risky, translating into comparatively lower premium for the customer. The colour factor would predominantly apply to car segments , since commercial vehicles do not usually come in a diverse range of colours. 'General information indicates that consumers are not aware of the visibility factors of certain colours when buying a vehicle and their preference is only for colours that they would find most attractive. The fact that certain colours are more or less visible at certain times of the day is a fact which would never occur to a layman, unless he is advised by the insurer or the dealer of the vehicle,' Ajay Bimbhet, MD, Royal Sundaram Alliance Insurance, told TOI.

The colour of the car can also be reflective of the sentiments of the driver. According to experts, statistics indicate that red colour cars have more accidents per capita than vehicles with lighter colours. According to a report, drivers of silver-coloured cars, have a 50% less chance of being involved in accidents and analysing scientifically, lighter coloured cars are more visible or perhaps the people who choose such cars are a self-selecting group of safe drivers.
So, how much more could consumers be expected to pay for a car with a less visible colour? "Logically speaking, the difference should be the accident rates ie the difference in the number of accidents per 100 cars for visible and less visible cars. Industry-wide, insurers usually pay Rs 60-70 as claims for every Rs 100 collected as premium,"a Rahul Aggarwal of Optima Insurance Brokers said. Insurers who have conclusive data on the colour factor may tweak their premiums to charge more /less, he added.