5 things you should know about Singapore auto insurance
We all know that car insurance is compulsory in Singapore, but do you have the knowledge necessary to choose the best motor plan for your budget and driving needs? Insurance jargon can be tricky to wrap your head around, which is why many drivers here end up buying an ill-fitting auto insurance plan. To ensure this does not happen to you, we strongly recommend brushing up on your motor insurance knowledge (even if it can be a boring endeavor). To help, today’s Kwiksure Singapore article presents the top five things you should know about Singapore auto insurance.
1. Many factors can affect your Singapore car insurance premium
Singapore auto insurance companies look at a range of factors when deciding how much they will charge an applicant. This process is called underwriting. Here are some of the most common factors used by all insurance companies when quoting a price for auto insurance in Singapore:
Your driving history
This is arguably one of the strongest factors influencing how motor plan premiums are calculated in the Lion City. Drivers who do not have a clean driving history (e.g. those who have demerit points on their license or a history of accidents) will pay more for motor insurance. The simple reason for this is that drivers with a history of accidents or driving offenses pose a higher risk to their insurer vis-a-vis those with a pristine driving history.
It’s not just your driving history that will influence the amount you pay for Singapore auto insurance. More specifically, drivers at either end of the age spectrum – i.e. young and old drivers – will likely be charged a higher premium for auto insurance. Beyond your age, insurers will also consider your driving experience (i.e. how long you’ve been driving). If you’re a new driver, you can expect to pay more for car insurance.
Do you have an NCD?
No Claims Discounts (NCDs) can shave off a significant amount from your Singapore auto insurance premiums. As a key feature of auto policies in Singapore, NCDs reward people who drive safely by giving them lower rates upon renewal. In Singapore, most car insurance companies will follow the below NCD scale for private cars:
- 1 year of claims-free driving: 10% NCD
- 2 years of claims-free driving: 20% NCD
- 3 years of claims-free driving: 30% NCD
- 4 years of claims-free driving: 40% NCD
- 5+ years of claims-free driving: 50% NCD
For commercial vehicles, on the other hand, the NCD scale is slightly different:
- 1 year of claims-free driving: 10% NCD
- 2 years of claims-free driving: 15% NCD
- 3+ years of claims-free driving: 20% NCD
The value and make of your car can certainly have a huge impact on what you pay for Singapore auto insurance. One interesting thing to note here is that insurers often charge a lower premium for more commonly driven vehicles vs cars that are less common.
2. The cheapest plans are often too good to be true
Let’s face it: we all want to save money. This means that a lot of drivers in Singapore compare auto insurance based solely on cost. Choosing the cheapest plan, however, is rarely ever the best choice. The top risks to watch out for when selecting the cheapest motor insurance plans include:
- Inadequate coverage (e.g. only the bare legal minimum)
- High out-of-pocket payments
- Non-existent customer service
- A very limited time window (e.g. 3 days) in which drivers must submit claims following an accident
3. The most common auto insurance exclusions
Regardless of whether you have a third party only, third party fire & theft, or comprehensive car insurance plan, there are a number of scenarios that virtually all motor insurance companies in Singapore will not cover. These include:
- Street racing
- Intentional damage
- Using your car for commercial purposes without the right commercial motor insurance
- Driving under the influence of drugs or alcohol
4. The info you need for a Singapore auto insurance quote
Getting an auto insurance quote requires having some details handy, namely:
- Knowing what type of auto insurance coverage you’re looking for
- Your car’s make, model, year of manufacture, body type, number of doors, chassis number, engine number, number of cylinders, and number of seats
- Your age, occupation, experience, driving history, and driving demerit points (if any)
5. Lock in the best deal by working with a broker
When shopping around for auto insurance, you will soon realize that premiums can vary significantly between different insurance companies. This means you’ll have to do a considerable amount of research to compare coverage and prices. One of the best ways of ensuring you get the best bang for your buck is to work with a reputed car insurance broker, like Kwiksure Singapore.
As a leading broker, we have close partnerships with all major insurance companies in Singapore, so you can rest assured of our ability to identify the best auto insurance plans for your needs.To get started with the Lion City’s best motor insurance broker, contact us today!