By Winston Lee
Most motorists are oblivious of which company their car is insured with until they are involved in an accident. And the more serious the incident, the greater the likelihood of realising just how good or bad their insurer really is.
Will repairs be done professionally and without delays? Will the company try to shirk its responsibilities? Will it fit second-hand parts to the damaged vehicle?
The whole chain of events usually starts during the purchase of a car. Most buyers will in all likelihood accept whichever company the salesman or his company has arranged.
It is the right of the car purchaser to insist on his own insurance company if he has a very good relationship with it in the past.
My advice is to check the terms and the reputation of the company recommended and if both appear reasonable, you can accept the salesman's choice.
About a month before the expiry of your current policy, your company may send you a reminder to ask you to renew your policy if its experience with you has been good. This is the time to start looking for different quotes from other companies.
The conventional way would be to appoint an insurance broker to source for different quotes. Some of the experienced agents are very professional in clinching the best deals. Other benefits include helping you to renew your road tax and delivering the insurance cover note and the renewed tax disc to your home or office. But there is a price to pay for the service. The premium quoted usually includes a 15 per cent commission for the insurance agent or broker.
New to Singapore is the direct insurance model. In June, DirectAsia.com launched an online insurance company here. Motorists can call or e-mail the company directly for a quote.
Mr Anthony Hobrow, chief executive officer of DirectAsia.com, says his company offers the best deal in town for safe drivers. Premiums are at least 15 per cent lower because it has a strict acceptance criteria. To qualify, drivers must be aged above 30 with no demerit points in the past three years, have an NCD (no claims discount) of at least 30 per cent and use their cars only for private commuting.
Mr Hobrow says: "We are in a position to offer the best price because we don't insure high risk drivers and we sell directly to our customers, in addition to managing our claims efficiently". DirectAsia.com is so confident in its offer that it will reimburse any qualifying customer the difference in premium between DirectAsia and any other insurer with a lower price.
Cutting out the middle man and insuring only low risk drivers will translate to lower premiums since safe drivers do not have to subsidise high risk ones. Unfortunately, this ultra safe policy means that even a mature and sensible 28-year-old professional cannot insure with it.
DirectAsia's safe approach includes not insuring fast and expensive cars like Lamborghinis, Porsches and Ferraris. And it is a definite "No" to rally cars like the Subaru WRX STi and Mitsubishi Evo. The claim experience in the insurance industry for the latter two cars has been awful.
Understandably, the premiums for these cars quoted by companies willing to insure them are exceedingly high. The safe family car owner is the type of customer DirectAsia is looking for. The customer can go online to ask for different quotes, depending on variables like excess amounts, use of replacement cars and windscreen cover.
To expedite repairs and minimise fraudulent claims, owners have to send their cars to the company's four authorised workshops. DirectAsia also has a dedicated company doing all their windscreen replacements, with services including pick up and return of cars after the work is done.
Sending the car to authorised workshops is a practice adopted by many insurance companies. It gives the insurers some control over the quality of work and possibly help minimise fraudulent or excessive claims.
Some insurance companies allow the car to be sent back to the dealer for repairs. Some even guarantee replacing it with a new car in the event of a total loss claim within the first year of registration. These are certainly plus factors in your insurance policy.
Most people are unaware that the so-called comprehensive insurance policy actually covers only third parties and your own car. It does not cover personal accident expenses incurred by yourself. For this, you will need a separate personal accident policy.