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How Insurers Calculate Premium


Car insurance Premium Calculations in Singapore

One of the most common questions insurers receive is how are premiums calculated

Unfortunately we can’t give a universal answer for this as every car insurance company in Singapore will have their own way of determining price.

We can give you a general overview of the many things we consider when coming up with your car insurance premium.

In general at DirectAsia.com, we feel that many Singaporeans drive responsibly and those who do should be rewarded with lower prices. But we also know that not everyone’s experience is the same and so we also offer customised pricing for things like when you need a chance to repair your driving record or lower rates for infrequent drivers.

The factors listed below are some of what we consider when you get your insurance quote price with us.

Some of what we consider

Driver's Age

Young and/or inexperienced drivers are perceived to be a greater risk due to having less experience on the roads. As such, young and/or inexperienced drivers will typically pay higher premiums than older drivers.

Driver's Record

Someone who’s made numerous claims or been in multiple accidents will be considered a higher risk than a safe driver.  Most companies will usually factor in the last two years' driving experience.

No Claim Discount

A No Claim Discount is a discount you get when you go a year without a claim. Insurance companies will give you a discount every year if you don't make a claim, up to a maximum of 50%.

Occupation Based Usage

The nature of your job can affect the cost of your car insurance premium. For example, an admin executive only needs the car to and from work but a sales person will have to travel to different locations to meet customers to hit their sales target.

How Many Miles

If you drive less your risk of an accident decreases. DirectAsia.com will give you a lower premium if you’re a low mileage/off-peak driver. 

The Value of Your Car

How much your car will cost to replace is a major component of your car insurance premium.  If you drive a VW Golf you’ll pay less than a Ferrari.

Engine Capacity

The size of the engine affects the insurance premium, as faster driving/acceleration poses a greater risk on the road for speeding/accidents. Note that a turbo engine car will often be charged higher even though they have a lower engine capacity.

Own Damage Excess

This is how much you've chosen to pay before the insurance company pays to reimburse your car accident repair. The higher the excess, the lower the premium.