We explain how to choose the right car insurance: types of coverage and terms like NCD and excess, how these affect your premiums, plus more.
Car Insurance Consists Of What Types?
For Singaporeans, it is a legal requirement to have auto insurance before driving a car under their names. Third-Party Only Car Insurance, Third Party, Fire and Theft Car Insurance, and Comprehensive Car Insurance Singapore are the three types of car insurance plans.
Singapore Auto Insurance Types
Insurance Covering Only Third Parties (TPO)
Singapore’s minimum insurance requirement is TPO, which provides the most basic insurance coverage. Third-party liabilities and third parties affected are covered.
Theft, Fire, And Third-Party Car Insurance (TPFT)
In addition to the basic coverage provided by TPO, TPFT provides additional coverage. Your vehicle is covered in the event of fire and theft when it is covered by TPFT.
Insurance For Comprehensive Vehicles
The coverage of comprehensive car insurance includes you, your passengers, your vehicle, and your liabilities in minor and major accidents.
Excess, Named Driver, And NCD All Mean The Same Thing?
Every driver needs to know these three terms when it comes to car insurance. According to the way you customize your policy, these factors can significantly affect your annual premium.
Excess – What Is It?
The excess is a fixed amount you pay ahead of time from your pocket before your insurer covers the rest of the damage. It is possible to customize the amount of excess payable.
Car insurance excesses can be divided into three types:
Damage to your vehicle is the only excess that applies in the ‘Own Damage’ category. Damages incurred by third parties are not included.
Damages to a third party are covered under this excess. In addition to paying your ‘Own Damage’ excess, you might also be required to pay this.
A claim’s excess is the amount payable to the insurance company for any incident resulting in damage, regardless of whose damage is covered by the excess.
Car insurance rates typically fall when you choose a higher excess. You make yourself more financially vulnerable on the road if your insurance pay-out is lower.
NCD (No-Claim Discount)
It encourages safe driving by offering a discount. Whenever you remain claim-free for a year, you earn a 10 percent discount; the maximum discount is 50%. An NCD isn’t necessarily compromised if the driver’s liability exceeds 20 percent under the Barometer of Liability Agreement (BOLA). They may achieve a 10% reduction in NCD.
The NCD protector scheme is paid for by some drivers. As a result, they can retain their NCD privileges by filing one claim.
You can transfer your NCD between vehicles as well. You still have a right to keep your NCD even if your car has been scrapped. Furthermore, if you own two vehicles, the NCD privileges may not apply to your second unit.
Insurers recognize named drivers to drive the car. Owners’ insurance policies cover them so that they can enjoy the same protection and privileges.
The driver(s) of the car are often added to reduce financial risks by adding family members. Unknown drivers who use your car can be assessed a higher excess by your insurer if they get into an accident.
How Do Insurance Rates For A Car Differ?
Different drivers pay different insurance premiums. Your car insurance premium will be higher if you perceive an increased accident risk.
Your car insurance cost in Singapore is determined by 11 factors:
- A European-branded car has a higher import tax and more expensive parts, so the premium is higher
- As your car gets older, your insurance rate will decrease generally
- The age of an insured – For people younger than 30 and older than 65, the premiums may be higher
- A job that requires you to travel outdoors indicates that you will use your car more frequently and are more likely to be involved in an accident. As a result, premiums may go up
- Marital status – If you are married and have a family, you may experience a lower premium
- Insurance premiums for younger drivers will be higher than for those with more than four years of experience
- Using a private hire vehicle tends to result in higher insurance premiums than using a private vehicle
- If you have made two or more claims in the last three years, a ‘loading fee’ will apply if you have made a claim over $10,000 or made a claim above $15,000
- Renewing policyholders who have not claimed a certain amount of time will be rewarded with a renewal discount.
- If you provide false information about your driving history, you may pay a higher insurance premium for dishonesty about your driving history.
- The price of the premium will increase if the modifications made to the vehicle are not LTA-compliant
To further help you in getting into a smarter decision, check the list of best car insurance in Singapore.