Choosing The Right Car Insurance Policy
Essential terms in relation to car insurance premiums
Car insurance premiums
Car insurance or motor insurance premiums refer to the actual money payable every 12 months to your insurance company for active coverage.
Excess
Excess refers to the amount of money you have to pay in the event that you get into an accident. Car insurance premiums and the amount of excess you pay vary inversely.
No Claim Discount
A No Claim Discount is a discount that is offered to you on your renewal premium if there are no claims on your policy during the current period of insurance. You may still be entitled to a No Claim Discount even if you have made a claim, provided you are not liable for the accident.
Types of car insurance
Comprehensive coverage
Comprehensive motor insurance offers the broadest protection and compensates you for your vehicle as well as third party fire and theft insurance, including third-party damage and medical liabilities, making it the most popular option for Singaporeans.
Third party fire and theft
Covers the loss of your vehicle through fire and theft, as well as the full scope of the third party only insurance.
Third party only
The cheapest, and thus, offers the least coverage. Compensates third-party damage and medical liabilities/death if and only if the insured is responsible for the accident.
The five steps to choosing the right car insurance policy for you
- Understand your needs
What kind of driver are you? Remember: your deductibles/excess vary inversely with the motor insurance premium payable.
- The cheapest car insurance
…is not necessarily the best car insurance and it is best to tailor your insurance to suit your needs. To illustrate, the cheapest auto insurance premium available would usually fall under the third party-only category, which provides the least coverage. In the event of theft, malicious damage or other circumstances not covered by the policy, you are not compensated and thus will have to pay even more than if you had chosen a more comprehensive coverage to begin with.
- Offline or online car insurance?
The primary difference between online and offline car insurance is the absence of a go-between agent for online insurance- keeping the costs low due to the absence of commission paid to agents.
- Other factors to consider
Factors that can affect the car insurance premium include your credit history, marital status, gender, age- younger drivers are statistically more liable to be involved in accidents- and your car model. A brand new sports car would cost a whole lot more to insure than a conservative sedan.
- Compare car insurance policies
Don't be a lazy buyer. Car insurance companies will often willingly give you quotes- talk to a few and compare them before making a decision. Remember to take note of other factors besides cost, such as the ease of making claims, optional add-ons, quality of customer service and so on- information only found by trolling forums or talking to other previous customers. The right decision now will save you a huge headache.
