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Car insurance can often reach exorbitant prices, especially if you have many add-ons. This article will give you some tips on how to lower your car insurance premiums across different insurance companies in Singapore.
No-Claim Discount (NCD)
If you have a motor insurance policy, you’re probably familiar with NCD, an amazing discount offered by all insurance companies.
A ‘No-Claim Discount’ is a reward from insurers to you for every year that you don’t make a claim. Basically, if you drive safely for a year and don’t get into any accidents, your NCD goes up by 10%. It can go up to a maximum of 50% - meaning you get 50% off your insurance premium at renewal by the 5th year.
Certain insurance companies also have special deals for their NCD. For example, Aviva has the lowest NCD penalty in Singapore, at a deduction of 10% per claim compared to the industry standard 30%. Others like Etiqa give you an additional 5% discount if you’ve been demerit-free for the past three years, commonly known as the Offence-Free Discount, meaning you get 5% extra on top of your NCD.
If you’re insured with FWD, you’re eligible for Lifetime NCD once your NCD hits 50%. This means half-priced premiums forever! Or perhaps you’re insured with DirectAsia instead. There, if you retain your NCD at 50% for the following five years, aka 10 years of safe driving altogether, you’re eligible for NCD60, and you get an additional 10% discount on your premium!
Opt For a Higher Excess
The excess is the amount of money you’re willing to pay out-of-pocket in the event of making a claim. It’s the sum of money that you have to pay first before your insurer handles the rest of the claim.
Although, if you opt to pay a higher excess, you get a discount on your premium! This is mainly meant for those policyholders who can fork out a little bit of extra cash on the spot. You shouldn’t just take this option up only to not be able to pay when you make a claim.
Some insurers, such as NTUC, have standard excesses that aren’t negotiable. Others, however, have something called ‘flexible excess’, which allows you to choose the amount of excess you are willing to pay upfront. This is where picking a higher excess will help reduce your premium.
But beware! Not all insurance companies offer this luxury. Some companies’ ‘flexible excess’ market it as an add-on, meaning an increase in your premium. Be sure to thoroughly check your policy before you start negotiating.
Go to Insurer-Authorised Workshops
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Every insurance company has a list of approved car service workshops that you can send your car to whenever you need repairs. However, there are plenty of picky policyholders, who prefer to repair their vehicle at their preferred workshop.
This is often marketed as a luxury that you’d have to pay extra for. Most insurance companies would have a slightly more expensive plan that lets you choose your own workshop, or have the “preferred workshop” as an add-on to your insurance plan.
Of course, these just rack up the costs of your premium. But that’s not what this article is about! So, in order to lower your premium, settle for an insurer-approved workshop instead!
Sacrifice the Extras
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What do we mean by this? Well, it means not adding any unnecessary add-ons or making modifications to your car. There are times when you want to spice up the appearance of your car, and it’s a great investment if you’re able to afford it (and as long as they’re LTA-approved).
But if you’re trying to save money, perhaps you should skip the vehicle enhancements. Every insurance company also has their list of add-ons which, as the name says, add onto your premium, increasing its price. Some add-ons may be worth it though, like the NCD protector, but there are often some additions that aren’t necessary at all.
Ultimately, this depends entirely on personal preference and budget. If you’re willing to pay more for some extra benefits, go right ahead! Just remember that the fewer additions you stack on top of your premium, the lower it is.
Certificate of Merit (COM)
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The COM is probably something that most drivers are unfamiliar with. For those of you who aren't in the know, the Traffic Police has a system to check if you’re abiding by the traffic law. This system is titled the ‘Driver Improvement Points System’ (DIPS) and it is a scoring system that keeps track of drivers’ performance on the roads.
But what is a Certificate of Merit? A COM is a document issued by Singapore’s Traffic Police to prove that a driver has been driving safely for the last three years. By this time, you would’ve already accumulated an NCD of 30%!
The COM allows drivers to gain further discounts from their insurers. This extra discount is called the Safe Driver Discount, sometimes referred to as the Offence-Free Discount. You’re allowed to place this discount on top of your NCD, meaning a slightly smaller payment for your premium!
Insurance Company Promotions
Last but not least, each insurance company has their own set of promotions that you can take advantage of for a lower premium, or even enjoy other perks! However, these promotions won't last forever, so grab them while you still can.
Here’s a list of some promotions you can check out to reduce your premium:
Name of Company
Some insurers even provide a loyalty discount for policyholders who renew their policy with them. Although, this doesn’t apply to every company, so be sure to check carefully with your insurer. Just a reminder that these promotions have deadlines, so make the best of them and bookmark your insurer’s website to keep an eye out for more promotions.
Overall, nobody wants to pay extravagantly high amounts for their premium which will bleed your wallet dry, but just enough so that you stay covered and protected. Having an insurance policy doesn’t mean that you can be a reckless driver, but is a precaution for unforeseen circumstances. Always drive safely and your insurance premium won’t skyrocket out of limit.
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