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Last Updated: 4 May 2023
Everything You Need to Know Before Choosing Which Singapore Car Insurance Policy Fits You Best
Don’t have any idea how to choose the right car insurance? Or you have an existing insurance plan and you’re tempted to renew, but still don’t know what’s ideal plan for you. Don’t worry, we have a comprehensive guide and listed the best car insurance right now.
Choosing the right car insurance policy is vital in helping you reduce your insurance costs when done right. That is why it is important to understand how to choose and buy such properly to help you maximise its coverage while getting it at the best price for your budget.
Having car insurance in Singapore is compulsory, that’s why it’s vital to get the best out of your plan.
How Should You Choose the Cheapest Car Insurance Premiums that Suit Your Budget Best?
1. Check before pursuing to auto-renew your car insurance.
Auto-renewals are found to be the main reason over a third of drivers in Singapore lose more than they could gain with their car insurance premiums. Your current provider may choose not to give you the best premiums for the next year of coverage as you are already an existing policy holder, denying you the opportunity of finding more cost-effective investments. It is good to stay informed about what are the best premiums for your car insurance every year to keep your budget in place.
2.Compare car insurance quotes from the top-rated insurers.
Comparing car insurance quotes helps you access which premium and coverage fit your budget and preference best. This provides you more time to look for more alternatives if your first choice doesn’t fit you well. During this time, it is best to converse with insurance agents that would explain to you the best of the details you would need in choosing which provider to invest in. You may also start from our list of top car insurance in Singapore.
3.Adjusting your car insurance coverage
There are insurance providers that will allow you to adjust the coverage of your plan inorder that you can have a lower premium to pay. One thing that you can do is by increasing your excess. The higher the level of your policy excess, the lower premium you need to pay. This is a good way in lowering the initial cost of the initial policy you intend to buy. Car excess is the amount of money you need to pay when making a car insurance claim. This will also mean that you need to pay more out of your pocket when encounter an accident. You may also look for a restricted workshop car insurance since this is much cheaper than the one allowing any workshops.
4.Being a good and safe driver.
Did you know that you can make your car insurance cheaper just by being a law-abiding driver? By not getting into trouble – avoiding reckless driving and getting into car accidents you can get up 10% off on your next premium every year of not having any claims. And this is in the form of No Claim Discount (NCD) which is capped at 50%.
The Types of Car Insurance and Their Coverage
In choosing which policy to choose, it is important to understand the different types of car insurance. In Singapore, there are three types of car insurance. The three types of car insurance plans are Third-Party Only (TPO), Third-Party, Fire, and Theft (TPFT) ad Comprehensive.
Third-Party Only Plan (TPO)
This is the most basic car insurance coverage. It is called a “Third-party only plan” because it literally means that its liability coverage protects the affected “third-parties”, this could include either an injured pedestrian or any sort of damaged property which was caused by your driving, with the right proof. Since it only protects the external “third-party”, you and your car are not covered, meaning you don’t receive a payout from TPO.
Should I get TPO car insurance?
- It is considered to be the bare minimum required in Singapore. If you wish to avail this, these are the important details to remember:
- You must be willing to pay for your own damages and to take high financial risks
- You rarely use your car on the road
- The loss of your car in an accident won’t have a great impact on your way of life
- The only protection you need for liability is against third-party bodily injury or property damage
- The vehicle you are using is a second hand or overused car that you plan on replacing soon, which means it does not need extra coverage
Third-party, Fire and Theft Plan (TPT)
In addition to covering liabilities, this type of car insurance also covers any loss or damage caused by fire or theft. Other indirect causes that have caused damage to your car will not be covered.
Should I get TPFT car insurance?
It will be more expensive since it covers more than TPO. Here are the important details to remember if you wish to avail of this plan:
- You are willing to pay more than the TPO plan
- When losing the whole car, you wish to avoid out-of-pocket expenses
- Some financial risk is present by paying for minor accidents
- You will be driving into countries with high crime rates of theft, fire, and arson
- The vehicle you are using is old but needs more than just a liabilities coverage
This plan contains all the necessary coverage. It includes the benefits of both TPO and TPFT. Additionally, it also includes protection against accidental damage to cars, either caused by natural disasters or self-imposed. It also covers medical expenses for the passengers on board.
Should I get comprehensive car insurance?
Here are the important details to remember if you wish to avail of this plan:
- You’re taking a bank loan for your car, so it is ideal as the insurance acts as bank collateral
- You want to minimise financial risks; you will be paying for a partial sum for the damages and the insurer’s will handle the rest
- You always use your car on the road
- You are not the safest or most experienced driver
- The vehicle you are using will cost a lot to repair as it is either brand-new, has a high value, or is a luxury car
Which Of The Car Insurance Plans Would Suit You Best?
In choosing which car insurance plan that would suit you best, here are the simplest breakdowns of the plans that would help you remember them instantly.
- Third Party Only Plan – covers third-party liabilities
- Third Part, Fire and Theft Plan -covers third-party liabilities and loss of car in fire or theft
- Comprehensive Plan -covers you, your vehicle, and your passengers plus minor and grave liabilities caused by accidents
Calculation of Car Insurance Premiums
Car Insurance premiums are based generally on your personal profile and the car you drive, along with the risk you wish to take and the risks that are present, both for you and the insurer. Generally, many factors will be taken into consideration such as your car make and model, age, driving experience, claims history, occupation, and marital status, in deciding how much to charge you.
Risks are measured differently by various insurers, with varied factors taken into consideration as well. High premiums don’t necessarily depend on your skills as a driver, but more on the general statistics related to your personal profile and the vehicle you are using. It is also important to use this as your basis in comparing alternatives to your different choices until you can find the one most suitable for you.
The Concept of “Excess” and Its Impacts
As car insurance policies are customizable, the cost of your insurance premium can be lowered by increasing your “excess”. This refers to the amount of money you will shoulder before making a claim on your insurance company. Most insurers in Singapore offer quotes based on a $500 or $600 excess, which somehow is the average amount drivers are willing to pay for “excess”.
This greatly depends on how much you are willing to pay and generally, again, on the risks you are willing to take. It is important to remember, however, that increasing your excess entails a higher price on your premium.
The Importance of Your Choice for Workshop In Your Plan
Your plan can be customised into choosing between “authorised workshops” and “any workshop”, which refers to which workshop you wish to send your car for repair, and will be covered by your car insurance.
The choice “authorised workshop” is cheaper because it refers to the list your insurer already has of workshops that they have already verified, with the right amounts that could fit your budget. On the other hand, “any workshop” is more expensive because the exceeding price for repair will be covered by your own pocket. If your car is brand new, you may choose this option because your car’s warranty with the car dealer may still be valid for repair.
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