Are you planning to buy car insurance in Singapore but not sure what coverage you need? If so, this blog is for you!
While car insurance has the same goal as other insurance policies—to protect yourself and other people dear to you, it entails different things that first-time car owners need to familiarize. There are terms solely regarded to auto insurance and crucial factors that can affect your premiums.
Read on to learn more about what these car insurance terms and considerations are.
Basic Terms to Know
- Agreed Value – refers to the amount you and your insurance company agree to insure your car for.
- Comprehensive Cover – is a type of automobile insurance, which covers the damages caused to you, your car and the third-party liabilities and losses.
- Excess – refers to the amount you’re required to pay upon a claim. The insurance company then pays the remaining sum of the financial damage.
- Deductible – is the amount you pay “out of pocket” pay toward repairs before your insurance covers the rest.
- No Claim Discount (NCD) – a discount given to car owners who get through a year without making a claim. Rewards could vary from premium reduction to protection from being penalized for a single, isolated claim.
- Nominated (Occasional) Drivers – person/s you nominate as occasional drivers of your vehicle (i.e., not the primary or principal driver).
Factors Affecting Your Premium
Before you buy car insurance in Singapore, be sure to look into the factors that affect your car premium. The cost of car insurance premiums vary from person to person, so understanding such factors may help you determine what policy to get.
Drivers with at least three years’ experience typically enjoy lower premiums. Young, inexperienced drivers using their parent’s car or with less than two years of experience may have higher excess of around S$2,500.
Your marital status could also influence your auto insurance rates. Married individuals may get a lower insurance rate because they’re likely more cautious when driving.
Inexperience is one reason why young drivers are costlier to insure than older drivers. The little experience a driver has, the bigger the chance for him to file an insurance claim. This is why the number of years you’ve been carrying a driver license is a huge car insurance factor.
Care insurance rates also vary depending on the model of the car. Basic cars usually have a lower insurance rate, while luxury cars and other vehicles with expensive spare parts translate to higher insurance premiums.
Usage of Vehicle
Other insurance companies ask for the use of the car—be it for day-to-day transportation or a necessity in the course of work. Typically, people with an outdoor sales job and are always on the road have a higher likelihood of an accident, hence the higher insurance rate.
The more accident-prone a driver is, the higher the premiums will be. On the contrary, drivers with a good record may enjoy a No Claims Discount (NCD) and get cheaper premiums.
The Number of Drivers
While you can choose to cover only yourself, including other drivers in your policy is also possible. However, doing the latter may play a crucial part in determining your premiums.
Bonus: Car Insurance Plans in Singapore
Now that you know what to look out for when getting car insurance in Singapore, it’s easier to decide which policy type best suits your needs. There are three plan types to choose from—comprehensive, third party, fire, and theft coverage (TPFT), and third party only (TPO) coverage.
Each plan offers a different level of coverage and has varying price ranges. Comprehensive plans are the most expensive as they provide broad coverage against third-party liabilities and loss or damages of the car. Examples of such covered damages include:
- riots, accidents, and vandalism
- contact with animals, such as hitting a deer
- falling or flying objects, like branches, rocks and
- natural disasters, including earthquakes, floods, and hurricanes
- theft-related damage, vehicle theft, or theft of certain parts of the car
The second option is a third-party fire and theft (TPFT) car insurance plan. As the name suggests, this plan promises three things—protection against damage caused to third-party, coverage on fire, and theft. TPFT plans are roughly 14% cheaper than comprehensive plans.
Lastly, third-party-only (TPO) protects the vehicle’s owner against any liability, such as death, bodily injury and damage, caused to a third-party person or property. Such a plan runs about 30% cheaper than comprehensive plans.
|Car Insurance Plan||Coverage|
|Comprehensive||legal liability to third-party, including bodily injuries and property damagedamage to own car due to accidental collision, fire, theft or natural disasters|
|Third-party & Theft||liability against third-party’s bodily injuries and property damagedamage to own car due to fire or theft only|
|Third-party||liability against third-party’s bodily injuries and property damage|
Singaporean law requires that all drivers in the country hold at least a third-party only insurance to manage the costs of claims by a third party. This basic plan covers the following:
- death or bodily injuries to third parties (including passengers)
- damage to property belonging to third parties
- accidents occurring on the road and private property
Summing It Up
The trick behind finding the right car insurance is knowing what benefits you want to get from your policy. Take the factors listed above into consideration, then discuss the coverage you want from a reputable insurance provider.