Singapore Car Insurance - Knowledge on Car Insurance Premium

In Singapore, car insurance premiums are priced according to the risk level insurers have to bear. As a consumer, knowing these factors help you navigate around potholes so you can get the most competitive motor insurance in the market -- every time.

In general, the following are major factors that insurers take into consideration:

1. Make and Model of Vehicle, Engine Capacity & Age of vehicle

Generally the more visually attractive & higher-performing cars with high engine capacity will attract the highest car insurance premiums.

2. Nature of Vehicle Usage (private use/corporate use/commercial use/hire, etc.)

Premiums change with different types of vehicle utilization. This is because the exposure to risk is higher for vehicles meant for commercial use or hire.

3. Age, Sex and Occupation of Driver

Insurers are biased – they tend to offer females better rates than males and prefer older drivers under seventy years old than young, inexperienced drivers. For the occupation of the driver, most insurers only classify them according to indoor or outdoor work.

4. Marital Status of Insured

Married drivers are charged less than single ones – sometimes this difference can be as much as 7%.

5. Driver experience (Number of Years)

Most insurers would not even bother to insure drivers who have less than one year’s driving experience and will slap drivers with only a year of driving experience with an exorbitant premium. With more than four years driving experience, you can enjoy better rates than drivers with less.

6. Claims History of Driver

Some insurers decline to quote drivers with a claims history of more than five thousand Singapore dollars. Driver with less than such claim amounts are often accepted, but they are often given very high rates.

7. Type of Cover (Third Party Only, Third Party Fire & Theft or Comprehensive)

The minimum requirement for vehicle insurance in Singapore is Third Party Only insurance, provided the finance company is able to accept this arrangement. This type of insurance costs the least, followed by Third Party Fire & Theft and Comprehensive Coverage Insurance. Generally, it is advisable to take up at least Third Party Fire & Theft coverage instead of just Third Party Only insurance so that you may not be in financial liability if your vehicle is destroyed by either fire or theft, assuming your vehicle is still under hire purchase.

Insurers will give each risk factor a weighting based on a range of statistics and past claims experience -- all these boils down to the business risk that car insurance companies have to take in order to maintain their insurance operation.

The good news is even if you do not understand how all these work, you can still benefit from market inconsistencies if you understand this fact:

Different insurers have different preference for particular brands or models, according to the claims experience in their company.

This is more apparent when insuring private vehicles, trucks and commercial vehicles than when it concerns motorcycles.

If you are able to get 6-7 quotes from different insurers, these inconsistencies become crystal clear. Even though their coverage may be the same, their premiums differ -- sometimes by as much as 79%.

Knowing this, you can grab at least six to seven quotes from reputable insurers in Singapore to compare quotes. Then grab the cheapest three to start comparing other features like windscreen coverage, loss of use benefit and workshop provision.

Finally, remember to ask for feedback on their customer service. It is really no use paying for dirt cheap insurance that takes many frustrating months to claim from. This can add undue psychological stress on top of the pressure that you have to cope with while dealing with the after-effects of an accident.

A summary of this article is available at eZineArticles - Singapore Car Insurance

This article was originally written by Carl Vouz, a prolific writer for the car enthusiast and auto insurance community. His articles are publicized widely and has helped car owners implement insurance tips that only professionals know.

Are You Paying Too Much For Your Motor Car Insurance?

Every now and then, people have had questions about their motor car insurance. This bit of info may help cut through the fog of car insurance complexities to give readers the clarity of how it all works:

FIRST - How Is Your Car Insurance Premium Calculated?

Premium is derived based on a Points System that takes mainly the following factors into consideration:

-- Characteristics of Driver (Insured) --

a) Age of Driver. Here’s the age group that most companies use and how much it affects your premiums:

18 to 21 yrs old -- $$$$
22 to 25 yrs old -- $$$
26 to 30 yrs old -- $$
31 to 65 yrs old -- $

b) Gender & Marital Status. Generally cheaper for females as compared to males; cheaper for married compared to singles.

c) Driving Experience. Calculated from the time you got your driving license, not your actual driving experience:

0 to 1 yrs experience -- $$$$
1 to 2 yrs experience -- $$$
2 to 4 yrs experience -- $$
> 4 yrs experience -- $

d) Job Nature (Indoor/Outdoor). Self-Explanatory.

Indoor - $
Outdoor - $$

e) No Claims Discount (NCD) - aka No Claims Bonus (NCB). This is the premium discount you can enjoy if you have not made claims with your insurance company

You get 10% NCD each year if you don’t make any claims during your policy year. Your NCB can accumulate up to 50% max.

For example, if your auto insurance is $1,000 and your NCD is 20%, the actual premium you’ll have to pay is $800.

If a claim is made during a policy year while you are still enjoying NCD, the NCD will be reduced the next time you renew your motor insurance. This is how your NCD is calculated:



f) Certificate of Merit Discount. A 5% discount is awarded to you (after deduction of NCD, if any) if you have NO traffic offense / demerit point(s) in the past 3 years.

To check if you’re eligible for Certificate of Merit Discount, Log On to eCitizen website (http://www.ecitizen.gov.sg) and select Transport -> Driving in Singapore -> E-Transaction -> Electronic Driver Data Information & Enquiry System.

-- Characteristics of Vehicle --

g) Engine Capacity (cc) & Engine Type. The lower the engine capacity, the lower your premium. Engine type refers to Normal or Turbo engine – obviously the turbo engine is going to be charged more.

h) Year of Manufacture. This generally means the year which your car is made/register.

i) Body Type. This refers to the type of car, eg. saloon, MPV, SUV, etc. Company usually charge more for unusual types of vehicle.

j) Off Peak Car (OPC). Generally, insurers tend to offer a slight discount for OPC.

SECOND - Finding a Cheaper Car Insurance

The price of car insurance premium change frequently - some people believe that it changes every 6-12 months. Therefore while Company X may offer the best deal this year, Company Y may be more competitive the next year.

This implies that you may have to compare different insurers’ quotes each time you renew your car insurance. You should get a good deal after comparing at least 6-7 companies. Of course, if you want the cheapest of all you’ll have to look for quotes from all the 20++ motor insurance companies in Singapore.

To compare several quotes, here’s one popular website you can explore using:

www.MotorInsuranceSingapore.com

Do take note that the quotes from different companies will come back with different excess amount.

For example, Company X may charge $2,000 with $600 excess while Company Y may charge $1,800 with $800 excess. This doesn’t mean that Company X is cheaper. It because the benefits offeredare different so they're priced differently. As to which is a better choice, this is a judgment call you have to make. (I’ll make a bet on Company Y ‘cos I very rarely get into any accident, at most very small ones)

Final Note:

Some of our motor insurance premiums have increased although we’re awarded with another 10% NCD & 5% Certificate of Merit Discount. This is almost certainly caused by the double increase in premium by all the motor insurance companies across the board in Singapore last year – yr 2008.

Ok, I think tt’s all for now. I’ll edit this post and include more info if anyone requests or feedbacks.