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Sep 9, 2022

Does the Colour Of Your Car Affect the Price Of Your Car Insurance?

After several days and months of deciding what meets your requirements and matches your budget, you arrive at a car that you want to buy. But it does not end there. There’s car insurance that you need to also look into. Vehicle insurance is a mandatory requirement for all motor vehicles registered in the country. You need to decide upon a policy at the time of registration of your vehicle and ensure its consistent renewal periodically. While the prices of car insurance plans are based on several factors like the type of plan, model and make of the vehicle, and engine capacity, there can exist some amount of confusion among buyers regarding the impact of the colour of the car on the total premium costs. The answer to this isn’t straightforward. Continue reading to know more about it.

Does the Colour of the Car Impact the Car Insurance Price?

Depending upon the type of insurance plan, let’s look at how the colour affects the insurance prices:

In the Case of Third-party Plans

As far as car insurance is considered, a third-party plan is the minimum required insurance coverage. The Motor Vehicles Act of 1988 makes it mandatory to have at least third party car insurance. The premiums for these third-party plans are determined based on the engine’s cubic capacity. Moreover, they are determined and governed by the regulator, the Insurance Regulatory and Development Authority of India (IRDAI). As there is no consideration for factors other than the engine’s cubic capacity, the colour of your car has no impact on the third-party premiums, directly or indirectly. You can visit the official website of IRDAI for further details. *

In the Case of Comprehensive Plans

Comprehensive plans, unlike third-party plans, are optional upgrades to your minimum insurance coverage. Thus, you can opt for a comprehensive policy in case you need broader insurance coverage for the repairs for your car, which are otherwise excluded from third-party coverage. In a comprehensive plan, the insurance company considers the age of your car, its engine capacity, and the policy features that you have opted for (add-ons) to determine the premium. Thus, the colour of your car does not have a direct impact on the premiums of a comprehensive plan. However, it has an indirect impact when you choose to modify your car. Modification of your car by changing the manufacturer’s paint job or by adding attractive graphics increases the value of your car. In these situations, the insurance company has to underwrite a higher risk. The value of your car increases upon adding fancy paints or graphics, and thus, indirectly impacts the premium. * *Standard T&C Apply

Wrapping it Up

To summarise, the colour of your vehicle does not directly impact the insurance premiums. There is an indirect impact on the premium by way of paint-related alterations. In case of any modifications during the policy period, it is best to inform the insurance company and not wait till its renewal. To determine how changing the colour of your car impacts the premium rates, you can make use of a car insurance calculator. This nifty tool is free and available on most insurance companies websites. With this tool, you can not only know how modifying your car impacts the premium but also use it to compare other available policies.   Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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