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.