Understanding your car insurance (Singapore) premiums can be quite a baffling thing. Numerous drivers have questioned about their car insurance premiums and yet have little understanding on how it all works.

This post give readers an insight on how car insurance companies in Singapore price their premiums – a real insider’s guide to the inner mechanism of how it works.

Car insurance premium is derived based on a Points System that takes mainly the following 2 categories of factors into consideration:

Category #1: Characteristics of Driver (Insured)

a) Age of Driver. Here’s the age group that most companies use and how much it affects your premiums:

18 to 21 yrs old — $$$$
22 to 25 yrs old — $$$
26 to 30 yrs old — $$
31 to 65 yrs old — $

b) Gender & Marital Status. Generally cheaper for females as compared to males; cheaper for married compared to singles.

c) Driving Experience. Calculated from the time you got your driving license, not your actual driving experience:

0 to 1 yrs experience — $$$$
1 to 2 yrs experience — $$$
2 to 4 yrs experience — $$
> 4 yrs experience — $

d) Job Nature (Indoor/Outdoor). Self-Explanatory.

Indoor – $
Outdoor – $$

e) No Claims Discount (NCD) – aka No Claims Bonus (NCB). This is the premium discount you can enjoy if you have not made claims with your insurance company

You get 10% NCD each year if you don’t make any claims during your policy year. Your NCB can accumulate up to 50% max.

For example, if your auto insurance is $1,000 and your NCD is 20%, the actual premium you’ll have to pay is $800.

If a claim is made during a policy year while you are still enjoying NCD, the NCD will be reduced the next time you renew your motor insurance.

f) Certificate of Merit Discount. A 5% discount is awarded to you (after deduction of NCD, if any) if you have NO traffic offense / demerit point(s) in the past 3 years.

Category #2: Characteristics of Vehicle

g) Engine Capacity (cc) & Engine Type. The lower the engine capacity, the lower your premium. Engine type refers to Normal or Turbo engine – obviously the turbo engine is going to be charged more.

h) Year of Manufacture. This generally means the year which your car is made/register.

i) Body Type. This refers to the type of car, eg. saloon, MPV, SUV, etc. Company usually charge more for unusual types of vehicle.

j) Off Peak Car (OPC). Generally, insurers tend to offer a slight discount for OPC.

Most car insurance (Singapore) quotations are valid only for 14 days, some for 30 days. And the price of car insurance premium change frequently – some people believe that it changes every 6-12 months. Therefore while Company X may offer the best deal this year, Company Y may be more competitive the next year.

This implies that you may have to compare different insurers’ quotes each time you renew your car insurance. You should get a good deal after comparing at least 6-7 companies. Of course, if you want the cheapest of all you’ll have to look for quotes from all the 20++ motor insurance companies in Singapore – and not all of them are good, really. In fact only some are worth looking at.

To compare several quotes, you can take 3 mins to fill in the form at Motor Insurance Singapore.

Return from Car Insurance (Singapore) Premiums – The Insider’s Guide on How It’s Computed to Motor Insurance Singapore Home

This type of motor insurance provides coverage only for (1) death or bodily injuries to third parties &/or passengers, and (2) damage to 3rd party’s property.

This is quite similar to the Act Liability Only Insurance, just that third-party insurance also covers against damage to property as well as accidents occurring on roads and private properties.

As the name suggests, this type of auto insurance doesn’t cover damage to the insured’s vehicle.

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First, let’s look at why the MIB was set up. Its main purpose is to handle motor claims in cases where (1) the negligent driver cannot be traced/located, (2) the negligent driver possess an invalid motor car insurance policy, or (3) the negligent driver is not covered by any auto insurance at all.

Under the above situation, the MIB will seek to compensate the third party (victim) for any bodily injuries or death. Unfortunately damages to anything other than death and bodily injuries (take for example, property damages) are not claimable from the MIB.

To undertake this public responsibility, the MIB is funded by a small contribution (levy) paid by its members. And all motor insurers in Singapore are (mandatory) members of the MIB, and their contribution is based in proportion to the motor insurance premium income they earn.

This is a little known information although it’s being taught to all drivers during driving theory lessons. Little known, yet it may be useful. You never know – you may be able to help a helpless soul with this information some day in the future.

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Why is it important to know how you’re charged for your motor car insurance? Because by knowing how you’re charged, you can somewhat get the best premium not only by comparing quotes, but also by influencing the factors that determines your auto (car or motorcycle) insurance pricing.

Insurers charge different premiums according to the risk they have to undertake. Most insurers in Singapore set the car insurance premium according to a range of factors. In general, the following are major factors that insurers take into consideration:

- Make and Model of Vehicle, Engine Capacity & Age of vehicle
- Nature of Vehicle Usage (private/corporate/commercial use, etc.)
- Age, Sex and Occupation of Driver
- Driver’s experience (No. of Years)
- Claims History of Driver
- Type of Cover (Third Party, Comprehensive, etc.)

Insurers will give each risk factor a weighting based on a range of statistics and their (insurers’) past claims information.

What do these information mean to you? You certainly may not want to change your vehicle nor change the type of cover nor the nature of vehicle usage. But you can try getting 6-7 quotes from different insurers because even though their coverage may be the same, their premiums may differ – sometimes by a long shot!

Some drivers also opt to insure their cars under another driver in their family who is more senior and who has more driving experience. Why do they do this?

In the perception of motor insurers, according to their statistics, a female has less risk than a male; a married individual has less risk than a single; and a more senior person has less risk than a young lad. (well, at least this is how the insurers see it)

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Car Insurance Terms That Can Save You Some Money

In Singapore, knowing these motor car insurance terms may save you a couple of hundred dollars as you are shopping for an auto insurance package for your vehicle.

The idea is to know what you need and what you don’t. For example, you may not need a courtesy car or towing/roadside assistance. Adding these into your coverage may cost you a little more than you’ll need to pay for.

So get familiar with these terms now:

Motor Premiums
This is the amount ($) you pay to insure your car from eventualities. Ensure your premiums commensurate with your risk profile. Always make sure that you’re not over-paying for your car insurance (or motorcycle insurance).

Excess Amount (aka Deductible)
Find out the amount that you might be required to bear when a claim is made. Eg. If your claims amount to $2,000 and the deductible is $600, you’ll have to bear $600 while the rest will come from the insurer’s pocket.

Every insurer will impose excess on policies – the higher the excess, the lower the premium charged and vice versa. And each insurer will state their excess amount when they make their offer (quote) to motorists.

No Claim Discount (aka No Claim Bonus / No Claim Entitlement)
No Claim Discount (NCD) reduces your car insurance premium significantly. If you have an NCD of 20%, you’re given a 20% discount of the premiums that you’re supposed to pay. You are entitled to NCD on renewal if you have not made a claim for a year. This is how NCD is calculated for subsequent years:

If a claim is made during a policy year while you are still enjoying NCD, the NCD will be reduced at the next policy renewal. The reduction of NCD is computed as follows:

Windscreen Damage
Many insurers provide you with windscreen cover (free of charge) but apply an excess of $100 for each claim. (check insurers’ policy)

Personal Accident Cover
Some insurers offers personal accident covers for you and your passengers as part of their insurance plan. (This may or may not be necessary for you, depending on whether you have an existing personal accident coverage)

Repair Options
Restrictions on repair workshops and new part replacement applies. Usually cheaper premium policy will tend to have more restrictions. This contributes to the advice that the cheapest motor car insurance may not be the best.

Towing/Roadside Assistance
Some insurers provide towing and roadside assistance in their plan.

Courtesy Car
Some insurers provide a courtesy car while your vehicle is under repair.

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