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

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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What are the different types of car insurance available in Singapore?

There are three main categories of auto insurance. Each category provides different coverage, thus impacting your right to claim should an accident occur:

(Most car owners in Singapore opt for the Comprehensive Cover, as it gives the widest protection)

Third Party Only Coverage, which covers:

- Death or injury to other parties
- Damage to other parties’ property

Third Party, fire and theft Coverage, which covers:

- Death or injury to other parties
- Damage to other parties’ property
- Fire damage to, or theft of, your vehicle

Comprehensive Coverage, which covers:

- Death or injury to other parties
- Damage to other parties’ property
- Fire damage to, or theft of, your vehicle
- Accidental damage to your vehicle
- Personal accident cover (for private cars only)
- Medical expenses (for private cars only)

Optional Benefits for Comprehensive Policies
(which may be subject to payment of additional premium)

- Windscreen damage
- Damage arising from riot, strike and civil commotion
- Damage arising from flood and windstorm
- Liability of passengers for acts of negligence
- Personal accident benefits for passengers
- Additional excess
- No-Claim Discount protection (for private cars only)

These Optional Benefits may seem like icing on the cake, but you may find them important nevertheless. Many reputable insurers include these benefits into their coverage while others don’t. Usually the VERY cheapest ones are just bare-bones in their coverage and thus do not include these.

If you feel that these optional benefits are important to you, choosing these bare-minimum budget quotes may do you no good. You may find that when the premiums for (let’s say) windscreen damage is added to their basic coverage, they’re actually more expensive than their competitors.

Of course, paying a premium for “brand names” may leave you with the shorter end of the stick in view of cost over benefit. And some motor car insurance are designed to cream “fat-cat” car owners. Avoid these. Do your due diligence of studying the quotes of different companies. This is where MotorInsuranceSingapore.com comes into the picture and it make things really easy for you.

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