Factor to consider when selecting car insurance | DirectAsia
Drivers in Singapore will know that you can’t quite drive your car on the roads here without a car insurance. So if car insurance is mandatory, shouldn’t one just choose the cheapest one for the purpose of fulfilling the requirement? Why spend more on a comprehensive car insurance?
Firstly, the price of car insurance is determined by several factors - age, driving history, the type of car you own and the age of your car. This is why you might find that you are not paying the same amount of insurance premium as compared to your father who has been driving for more than twenty years.
In short, it all depends on how your car insurer determine your risk profile.
And since you can’t really do much to change your age or driving experience, you can still find ways to get a car insurance that suits you. You can of course, go ahead to get a cheap one, but let’s just say paying for a cheap insurance that doesn’t provide much for your needs is essentially wasting your money.
So rather than look at just the price factor, how should you pick your car insurance?
You might already know that most car insurers here offer three main types of car insurance coverage.
- Comprehensive - for the greatest peace of mind
- Third Party Fire & Theft (TPFT) - for a bit more than the minimum with extra options
- Third Party Only (TPO) - for the least amount of cover to get you on the road.
The comprehensive option offers the most protection, but it also comes at a higher price. Having said that, it might make sense to take this option if you’ve got yourself a new car.
If the price of your premium is a huge factor for you but you don’t want to lose the coverage, you can try to play around with the Excess. “Excess” refers to the amount of deductibles you have to pay before the insurer pays for the rest of your claims.
For example, Alan is driving his new car and accidentally bumped into someone’s car during a traffic jam. Say if the cost to fix the damage is $2,000. His excess is $500, which means the insurer will cover the remaining $1,500.
Generally, the higher the excess you choose, the lower your premium.
3. Benefits differ
What makes you choose a health insurance from Insurer A and not Insurer B? The details of the benefits matter. Depending on your insurer, some might have auto-included certain benefits which you do not need. DirectAsia allows you to customise your car insurance plan so that you only pay for what you need.
Do you already have your personal accident plan? If so, you could actually do away with a car insurance that automatically include this benefit so that you enjoy a lower premium. Or you might already have your favourite workshop to work on your car, but most basic car insurance will only allow you to have your repairs done at a list of authorised workshops.
Another benefit that you should probably consider is adding named drivers to your policy. As cars are expensive here, many people actually share their cars amongst family members. You might think that adding another named driver is just unnecessary cost, but you might regret it if your brother got into an accident while driving your car since the excess is going to be much more than if he was a named driver.
One of the best ways to ensure that your car insurance premiums are kept low is to be a safe driver. Building up your No-claim discount can help you reduce your premiums by more than half! You can also take-up an NCD protector to help you keep up your no-claims record.
There are many things where you can save money on, but when it comes to keeping you safe on the road, choose the right car insurance, not the cheapest!