How will a Car Accident Affect my Insurance Premium?
Why do we buy a car insurance? Other than it being a requirement to drive your car on the roads in Singapore, there’s also the protection aspect that most drivers are looking for. We all know that getting into an accident can be an expensive affair here; other than having to pay for any third party damages, there’s also our precious car that would probably need some extensive work following a crash.
But the funny thing is some people actually think twice before submitting a claim for their car insurance. Why?
This is because some drivers are afraid of losing their No-claim discount (NCD), as well as face a hefty increase in their insurance premium following a claim. Are these concerns valid or are they misconceptions? Let’s find out:
A car insurance claim will inevitably lead to higher premiums upon renewal
There is usually a premium increase at renewal if you are found to be at-fault for the accident, whether you knock into someone else (Third Party) or damage your own car (Own Damage, e.g. knocking into a lamp-post or hydrant…).
The good news is that not all claims lead to higher premiums. These following claims typically incur no penalty:
- Claims where the insured is found to be not-at-fault
- Breakdown/Roadside Assistance
- Windscreen claims
A claim will affect my No-claim Discount (NCD)
An NCD is a discount that we offer on your renewal premium if there are no claims on your policy during the current period of insurance. This is to reward safe drivers and motivate them to stay safe on the roads in order to enjoy cheaper premiums. 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 and that you have been insured with us for the past 12 months.
The standard industry practice is that drivers lose 30% of NCD subject to a minimum NCD of 0% for each at-fault claim, though there can be some slight differences between various insurers.
However, if you settle the claim privately, NCD will not be affected. This is why if the claim is small, some drivers prefer to settle it privately and protect their NCD instead. You can also choose to add on an NCD protector optional benefit to your car insurance with DirectAsia which entitles you to waive one at-fault claim so that there is no penalty.
Too many accidents/claims will increase my insurance premium rates
Being involved in more accidents will convey to your insurer that you are a higher risk driver.
Our SOS cover is designed specifically to help drivers needing a second chance. If you've had multiple accidents, it can be difficult to find car insurance in Singapore. Our SOS plan gives you a complete range of cover including liability to third party and loss due to fire, theft and natural disasters. It also covers window breakage and towing expenses.
Some drivers assume that the severity of the accident - greater amounts of damage are likely to lead to a greater rate hike because the insurance company has to make a larger payout. But for DirectAsia, we usually associate the accident frequency to a risky profile more than a one-time unfortunate accident which results in a large claim.
Does having a long history of safe driving help?
If you have a long history of safe-driving and you have been with DirectAsia for a long time, you may see less dramatic hikes in your premium than someone with a poor driving record. NCD protection is usually available for customers above a certain NCD. In addition, there are premium discounts for being traffic offence-free for a few years (Certificate of Merit from Traffic Police) entitles one to a discount for most car insurers.)
At DirectAsia, we aim for transparency with our customers and do our best to help you find the most economical way to stay safe on the roads. Have more questions about our SOS insurance? Feel free to contact our friendly customer service officers at 6665 5555 or ask for a free quote now to start insuring with us!