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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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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