How to Choose the Right Private Car Insurance Policy

Motorist How To Choose The Right Car Insurance(Photo Credit: Pixabay)

So, you got a new car, but you’re unsure what kind of car insurance policy is the best for you. With so many options to choose from, we’ll show you how to pick the best insurance plan for yourself.

This is a pretty long but detailed article, so grab a snack or a drink before we begin!

’Driver’ Factors that Affect Your Policy

Motorist Car Insurance Driving Car(Photo Credit: Pexels)

There’s a few factors that are taken into account when you purchase an insurance policy, and some of these factors include what kind of driver you are.

Let’s have a look at what these factors are.

Age

Insurers are pretty strict when it comes to age. There’s a term called “Young/Inexperienced Driver(s)”, which usually points to drivers that are in their early 20s, and/or have less than 2 years driving experience.

Young or inexperienced drivers tend to get higher premiums, due to the higher risk of getting into an accident.

Sometimes, it’s the complete opposite! If you’re too old, perhaps over 70 years old, you may receive a high premium as well.

Here’s a comparison of some motor insurance companies and their excess amounts for young and inexperienced drivers:

Company Name

Age

Excess Amount

AIG

< 23

  • S$3,000 (before GST)
  • S$500
  • S$3,000
  • S$2,000
  • S$2,500
  • S$3,000
  • S$3,000

Aviva

< 24

  • S$2,500 (Lite and Standard plans)
  • S$0 (Prestige)

AXA

< 27

  • S$2,500 (AXA Premium workshop)
  • S$5,000 (Non-AXA Premium workshop)

Budget Direct

< 25

-

China Taiping

< 22

-

DirectAsia

< 30

Etiqa

< 24

-

FWD

< 27

-

HL Assurance

< 27

-

MSIG

< 27

-

NTUC Income

< 27

  • S$2,500 (< 1 year driving experience)
  • S$500 ( > 1 year driving experience)

Sompo

< 25

  • S$1,500 (Named driver)
  • S$3,000 (Unnamed driver)

The excess is the amount you have to pay upfront when you get into an accident. Young/inexperienced drivers tend to have a higher excess compared to policyholders.

Gender

Yep, that’s right. Gender plays a part when you purchase motor insurance. This is because some insurers believe that females are more careful drivers as compared to men.

In short, female drivers may get a lower premium.

AXA offers a plan titled ‘For Her’, which, as the name suggests, is only for women. According to their website, AXA’s female-tailored plan actually provides more coverage than any other insurance plan.

Some added perks include:

  • Phone Assistance and Roadside Support
  • Excess Waiver from 3rd Year
  • Daily Transport Allowance

Marital Status

Several studies done the past decade or two have shown that married drivers tend to make fewer claims a year as compared to single drivers.

The theory behind it is that married drivers are more responsible than single drivers; the latter being more likely to be involved in drink-driving accidents.

So if you’re married, you’ll get a lower premium as compared to those who haven’t tied the knot.

Occupation

Did you know your job actually determines how much your premium costs?

Depending on whether your job is indoors or outdoors, the price of your premium could vary.

Indoor jobs usually mean that the drivers park their car in a car park and not touch it till the end of the work day. Outdoor jobs, on the other hand, are jobs that require a lot of movement on the roads.

Drivers who travel a lot by car on a work basis tend to have higher premiums due to the increased risk of an accident.

Driving Experience

Reiterating the young/inexperienced driver talk from above, a shorter time driving leads to higher premiums.

The more years you spend driving, ideally four or more, the cheaper your premium will be.

With more experience on the roads, the more familiar you will be with driving and therefore, you’ll be less likely to get into an accident.

Claim(s) History

This is more for drivers who are switching insurers. When you buy car insurance for the first time, your claim history will be at 0, but for those who have been on the roads a while, it might differ.

When you make an insurance quote or apply for a new policy, insurers will ask for your claim history. If you have made any claims during your policy period, your premium may increase.

The higher the number of past claims, the higher the premium. Some insurers may also be reluctant to allow you to buy/renew a policy with them.

But don’t fret! DirectAsia has a special car insurance plan catered specifically to repeat offenders. It’s called “SOS Car Insurance”. You can read more about the policy wording here.

No Claim Discount

This one is actually the opposite of claims history! When you purchase a new car insurance policy, you’ll be asked to state your NCD level.

NCD is the discount you earn for every year you don’t make a claim. So if you’re a new driver purchasing insurance for the first time, your NCD will be at 0%.

The higher your NCD level, the lower your premium.

Establish What Kind of Car You are Driving

Motorist Car Insurance What Kind Of Car(Photo Credit: Pexels)

Besides the driver, your car also plays an important part in determining the premium price. Here’s what’s taken into consideration.

Make, Model and Origin of Car

You’re probably wondering what the “origin” of a car is. Well, in this article, we’re referring to the country where your car comes from. For example, Toyota comes from Japan.

In Singapore, the most common car brands come from either Japan or continental Europe, the latter often referred to as “continental cars”.

Insurers will give you a different premium based on the make and model of your car. Japanese cars would more likely receive a lower premium than continental cars.

Why is this?

Japanese cars are easier to ship to Singapore, and it also has lower import taxes as compared to continental cars. Continental cars also require more expensive parts that can be hard to get in Singapore.

Continental car brands include:

  • Mercedes-Benz, Audi, BMW, Porsche, Volkswagen, Fiat, Alfa Romeo, Ferrari, Lamborghini, Pagani, Maserati, Aston Martin, Bentley, Jaguar, Rolls-Royce, Lotus, Bufori, Land Rover, Bugatti, Citroen, Volvo, SEAT

Japanese car brands include:

  • Mazda, Daihatsu, Infiniti, Honda, Isuzu, Lexus, Mitsubishi, Mitsuoka, Nissan, Subaru, Toyota, Acura, Suzuki

Be sure to check with the insurer of your choice if they are able to insure your car make, as some insurers don’t insure certain brands.

Engine Capacity

As mentioned before, continental cars require more expensive parts – including better engine parts.

These cars tend to have better engines as compared to Japanese cars, often with a larger capacity. This causes the premiums for policies to be more expensive.

Age of Car

This refers to how long your car has been driven by you. When you purchase a new car, you’re also paying for the Certificate of Entitlement (COE), which allows you to drive on the roads for 10 years.

Although, some drivers like to keep their cars even past the COE expiry date.

The older your car, the lower your premium.

Car Mileage

Mileage is the amount of distance travelled by your car annually, which is dependent on how much you use your car.

The lower your mileage, the cheaper your premium.

There are insurers who give you discounts if your annual mileage is low, like NTUC, DirectAsia and MSIG.

NTUC provides up to 69% discount on your premium, while DirectAsia and MSIG have insurance plans specifically tailored for low-mileage drivers.

Types of Car Insurance Covers

Motorist Car Insurance Coverage Types(Photo Credit: Pexels)

There are three main types of plans that insurers offer, namely:

  • Third Party Only (TPO)
  • Third Party, Fire and Theft (TPFT)
  • Comprehensive

Singaporeans must purchase one of these plans as driving without insurance is considered an offence.

Let’s break these covers down.

Third Party Only (TPO)

This covers the damage caused to a third party in accident. Damage can include bodily injuries, or damage to vehicles and other physical property.

TPO provides the least coverage to the driver as it only covers the driver’s legal liability for causing damage to a third party.

Third Party, Fire and Theft (TPFT)

Similar to TPO, but with a more extensive coverage. It covers whatever TPO covers, but also covers the driver this time.

This one covers damage caused by fire and/or theft to your vehicle. Since it covers more, it is pricier than the above option.

Comprehensive

This one provides coverage to the third party, and also extensive coverage to you!

It is the priciest plan out of the three, but provides so much protection that it is often the most purchased type of coverage.

After all, wouldn’t you want to be protected in the case of an accident?

Comprehensive coverage can protect you not just from fire and theft, but also from floods and other disasters. It also helps cover damage to your own vehicle if you get into an accident.

Insurance Plans for Private Cars

Motorist Car Insurance Plans(Photo Credit: Pexels)

Now, we’ve put out quite a number of car insurance articles already, so you’ve probably had some idea on what kind of plans you can take advantage of.

This is also the one where its easiest to find insurance policies and discounts.

Let’s look at some insurers and some things they offer.

Company Name

Comprehensive Plans Offered

Other Perks

AIG

  • AutoPlus
  • AutoPlan
  • AutoValue

-

Aviva

  • Motor Lite
  • Motor Standard
  • Motor Prestige
  • Lowest NCD Penalty (10%)

AXA

  • Essential
  • Essential+
  • Peace of Mind
  • For Her
  • Flexi
  • Flexi+
  • Flexi Family
  • ‘For Her’ is a plan tailored for women only

BudgetDirect

  • Comprehensive

-

China Taiping

  • AutoExcel
  • AutoSafe

-

DirectAsia

  • Comprehensive
  • SOS
  • Comprehensive Low-Mileage
  • NCD60
  • ‘SOS’ plan for those who can’t get insured anywhere else

Ergo

  • Comprehensive

-

Etiqa

  • Comprehensive
  • TEIF weekly sale

FWD

  • Classic
  • Executive
  • Prestige
  • Lifetime NCD

HL Assurance

  • CarProtect360

-

MSIG

  • MotorMax
  • MotorMax Plus
  • UMax
  • UMax Plus

-

NTUC Income

  • Drivo Classic
  • Drivo Premium
  • Drivo Prestige
  • ‘Drivo Prestige’ for Porsche drivers only

Sompo

  • ExcelDrive Focus
  • ExcelDrive Gold
  • ExcelDrive Prestige
  • FREE NCD Protector

Tokio Marine

  • Comprehensive

-

Be sure to read through the policy wordings for each plan carefully to make sure that you’re really getting what you’re paying for.

What Add-Ons Should I Get?

Motorist Car Insurance Add Ons (Photo Credit: Pexels)

Add-ons are optional items that drivers can stack on top of their current policy. They have a huge range and differ from insurer to insurer.

Pro: You can get more extensive coverage, extra protection, etc.

Con: It results in an increase in your premium.

When drivers purchase a new insurance policy, it can be daunting choosing from the massive list of add-ons.

As add-ons differentiate between insurers, we won’t list out all the different kinds. Instead, we will give you some advice on how to choose the right ones.

Read Through Everything Carefully

One of the biggest mistakes many drivers make – not reading the fine print. Besides the policy wording, you should also read the fine print when it comes to add-ons.

Don’t blindly pick an add-on just because it’s in front of you; read everything carefully and make sure you’re paying for what you want or need.

Keep the Number Low

It’s probably not practical for you to purchase every single add-on in the list. Instead, you should weigh the pros and cons of each option and come to a conclusion.

Purchase the ones you think will benefit you, and forgo the ones that don’t really catch your eye.

If need be, you could always request to add them on when you renew your policy.

Compare Against Other Insurers

This could also apply to just the insurance plans, but at times, some insurers offer something as an add-on while others give it away free.

For example, the NCD Protector. It’s an add-on given by several companies to help you protect your NCD for one claim.

But why spend money when you could get it for free?

Insurers like Sompo and China Taiping give you a free NCD Protector when you insure with them, while other insurers will increase your premium if you opt for this.

In short, make some comparisons.

How to Compare Insurance Policies

Motorist Car Insurance Compare Quotes(Photo Credit: Pexels)

And how exactly should you make your comparisons?

Online, of course!

Many insurers have something called an Online Quotation System (OQS), which allows you to key in your basic information and see how high, or low, your premium will be when you insure with them.

Here’s the list of insurers that have an OQS:

Some insurers have interactive Quotation Systems, like Budget Direct:

Motorist Insurance Online Quotation System Budgetdirect(Photo Credit: Budget Direct)

Others have simple-to-use Quotation Systems instead, like HL Assurance:

Motorist Insurance Online Quotation System Hlassurance(Photo Credit: HL Assurance)

However, if you feel too overwhelmed, we here at Motorist can help you choose the best insurance policy. Just give us your car details and we’ll compare quotes for you and propose the best one!

Once you have compared the different companies and experimented with the add-ons, you’ll be able to pick the right insurance policy for yourself! Don’t be afraid to take time to really decide on the best plan.

But never pick a policy because it’s the cheapest! Sometimes forking out a little bit of extra cash can help you drastically in the event of an accident.

Focus on your budget and the elements you want to get, and don’t be afraid to ask for help!

I want to find the most affordable car insurance plan within 24 hours!

Read More: Which Company Provides the Best Motor Insurance Coverage for Cars?


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