In the old days (before Sep 1989), insurance premiums were derived using a standard table provided by the General Insurance Association of Singapore (GIA). This table is known as a Motor Tariffs Table.
Under this system, factors such as the ones below were used as a basis for computation:

- Type of Cover,

- Engine Capacity,

- Carrying capacity of Vehicle,

- Car usage, and

- Value of vehicle

After that, the Motor Tariffs Table evolved into the Points Rating System. The major difference between these two systems is that the Points Rating System takes into consideration the characteristics of the driver – age, marital status, indoor/outdoor job, et cetera.

Then in Jul 2001, the GIA formed a Motor Insurance Task Force (MITF), which promulgated a Risk Factor Premium Rating System, improving upon the previous system.

Under this system, points are awarded to various risk factors, based on the industry or insurer’s own risk profile and claims experience.

This means that if there’re lots of people who’re making claims against a particular insurer compared to the other insurers, this insurer will tend to (or rather…have to) charge higher premiums so as to conform to the Risk Factor Premium Rating System. And of course this REALLY makes sense for this particular insurance company’s financial health as well.

Enough of the insurers. Now, let’s talk about you…

What does the above information mean to you?

It implies that even though you have submitted the exact same information to different insurers, the premiums that you’re charged for your auto insurance WILL be different. This is because the points that you’re awarded (internally) by the insurers will be different, due to the company’s own risk profile and claims experience.

Therefore the only logical action that you HAVE to take is to compare several different quotes from different established and reputable auto insurance companies. You’ll thus be able to tell which motor car insurance company gives you the best deal.

Of course it’s a great hassle to do so, but it’s well worth it. And you don’t have to do it yourself if you have a car insurance quote comparison service working for you.

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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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