Car Insurance | 5 Myths Busted
5 Common Car Insurance Myths Busted!
Reading time: 4 mins
Purchasing insurance for your car doesn’t have to be a tedious process. What you have to note are the main factors that affect your policy and premium such as the cover type and optional benefits required to help you make the most of your car insurance.
However, there’s a lot of mixed information about car insurance out there; some are fundamental truths while some are just common misconceptions. Without knowing what’s fact from fiction, you could find yourself overpaying, or worse – without the right coverage you need.
So, to help clear things up regarding your auto insurance policy and put your mind at ease, here are 5 common car insurance myths debunked!
Common Car Insurance Myths Vs the Actual Facts
Myth #1 - The Colour of Your Car Affects Your Insurance Premium
Fact: Car colour and insurance premiums have no connection with each other
This is a very common but baseless myth. However, some believe that cars with a striking paint job or funky vinyl wrap costs more to insure. This is not true. So, don’t let this stop you from getting a custom paint job or personalising your car’s exterior with a car wrap.
The truth is, the cost of your car insurance policy is based on other factors such as your car’s age, make, model, usage and other major modifications approved by Singapore’s Land Transport Authority (LTA), but not the colour. Insurers also take into account the age, marriage status and driving record of the driver when quoting car insurance premiums.
Myth #2 - Comprehensive Car Insurance Covers Everything
Fact: Comprehensive car insurance covers most incidents but not everything
Contrary to common belief, comprehensive car insurance coverage does not mean total coverage. Yes, it covers you for main incidents like damage to your car and the car you hit (if at-fault), injury caused to the other driver or passengers, compensation in the event of fire and theft, as well as damage caused by natural disasters. Windscreen damage and towing after an accident are also covered under DirectAsia’s comprehensive cover.
However, for maximum coverage, there are other optional benefits you can add-on to make the most of your car insurance policy. For example, DirectAsia gives you the option to add-on Medical Expenses that covers up to $3,000 per person for medical treatment costs, if you or your passengers are injured due to an accident. Besides that, to protect the contents of your car, you should opt for DirectAsia’s My Accessories optional benefit. This covers the cost of replacing or repairing damaged solar film, suspension, stabiliser system and air intake/exhaust system, or in-vehicle entertainment systems, car camera, body kit, rims and tyres that have been stolen from your car.
These additional add-ons are not included as part of the main policy, so you have the option to pick and choose what suits your needs and budget. If you don’t have any fancy gizmos installed in your car, then you can exclude it from your coverage altogether and pay a lower cost.
Myth #3 – You’ll Lose Your No Claim Discount (NCD) If You Meet with an Accident
Fact: You can protect your NCD even if you meet with an accident during your one-year tenure
A No Claim Discount (NCD) is a discount on your premium if you haven't made any claims on your policy during the period of car insurance in the previous year. Typically, if you’ve had an accident and made a claim on your previous insurance tenure, you lose a percentage of your NCD discount on your new policy with most insurers.
However, with DirectAsia, you can opt for the NCD Protector Plus that allows you to preserve your discount eligibility. In fact, you will still be able to advance to the next NCD level if you only have 1 at-fault claim - only applicable for NCD30, NCD40, NCD50 and NCD60.
Also, do note that the protected NCD may not necessarily be transferable to another insurer.
Myth #4 - If Another Driver Meets with an Accident in Your Car, They Are Automatically Insured
Fact: Only named drivers or those that are eligible under the Value Plus Plan will be able to make a claim
Car insurance coverage in Singapore is tied to the vehicle and not the person driving it. Therefore, it’s always best to remember that if you lend your car to a family member or friend, you cannot extend your car insurance to them unless named under Drivers & Usage in your policy.
However, with DirectAsia, under the Value Plus Plan (VPP), any experienced driver above 30 years old with a valid driving license for at least 2 years and up to two named inexperienced drivers are automatically covered under your policy.
Myth #5 - Going for Minimum Cover Saves You Money
Fact: This may seem true at first, but not in the long run
You may think that taking the least-possible cover that is mandated by the law can help you save money when first buying insurance. But, although you may save a little at the beginning on your premiums, you can actually end up spending a lot more if you get into an accident.
Accidents can occur at any time; so, having minimum cover means you are likely to pay more out-of-pocket for accidental/unexpected damages. Therefore, getting the minimum coverage is not a wise decision to make. Rather, you should opt for a comprehensive cover with the relevant optional benefits, according to your needs.
Get the Facts Straight!
These are the top 5 car insurance misconceptions that many think to be the truth. But all of these myths have no plausible basis. Securing your vehicle from any type of unanticipated damage or accident is essential, so read up on the terms and conditions of car insurance before rushing to get one.
Make sure you understand all that your car insurance has to offer, and what it doesn’t. Knowing the workings of car insurance can go a long way in steering clear of such myths and securing the safety of your car, yourself and your passengers.
With this false information surrounding auto insurance, it’s best to work with a trusted insurance company. Contact us at DirectAsia to get a clearer understanding of your car insurance options.