INSURE RIGHT NOW (SINGAPORE)

A Word on Insurance Types

 

Before we get into it, a word on different types of insurance:

 

If you didn’t get a bank loan for your car, you have two options: TPO (Third Party Only) and comprehensive. TPO insurance is almost always cheaper. It would have to be, since it only covers the other guy’s damages in an accident. But if you worry about premiums, you might want that anyway.If you took a bank loan, you’re required to get comprehensive insurance.

 

Use the following methods instead:

 

1. List an Older or Female Main Driver

 

 

 

 

 

 

 

 

 

 

Insurers assume older drivers don’t speed.

 

In general, if the main driver is 40 to 50 years old, the premiums will be lower. And premiums are also slightly lower for women. These people are believed to be safer drivers.

 

 

2. Compare and Contrast

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance companies use different algorithms.

 

For example, say you’re 30 years old, and you inflicted a car accident 10 years ago. Company X might decide that older is wiser, and what happened 10 years ago is trivial. They’ll raise your premiums for the accident, but not by much. But company Y might decide “Once a speed freak, always a speed freak”, and file your premiums on the top price band.

 

On top of that, insurers have sales quotas. Premiums go down when they’re trying to recruit more customers, so those are the best times to buy.

 

If it’s too troublesome to call every insurer, you can do it online.

 

 

3. Be Choosy about coverage

 

 

 

 

 

 

 

 

 

 

Comprehensive (adjective): Complete; including all or nearly all elements or aspects of something.

 

Apparently, insurers don’t get that. They have a whole bunch of tag-along options. Why stop at car-related damages? You can include coverage for personal accident, windscreen damage, damage from riots, damage from negligent passengers, and probably damage from alien orbital strikes. Hey, it might happen.

 

I spoke to a few motorists about extra coverage. Mr. Wai Foong, who supervises a car workshop, had the most sensible advice:

 

“You pay every month to cover windscreen damage. Maybe after eight years of driving, your windscreen will crack once. Replacement cost maybe $150 – $300. This amount, compared to the extra you pay every month for eight years…is it worth it?”

 

Trim your coverage options. Remember, the premium costs over a few years might greatly exceed one-off repair costs.

 

 

4. Check before modifying your car

 

Consult with your insurer before modifying your car.

 

Right now, half of you are thinking “Why would I? I’ll just mod it and they’ll never know.”

 

Because if you get into an accident, and then they learn about the mods, they’ll scratch off your policy.

 

Insurers in Singapore are notoriously strict: Even minor cosmetic tweaks, like switching to sports rims or using a body kit, might count as “modification”. Most insurers need insist anything outside a manufacturer’s “defined specifications” is a mod.

 

Note that the LTA (Land Transport Authority) tolerates changes that’s within manufacturer recommendations, not just “defined specifications”. As such, changes to your car can be LTA compliant, but still result in policy termination.

 

So ask first, do later.

 

 

5. Decline Preferred Workshop Options

 

All insurers have a list of authorized and agent workshops. When you want to make a claim, these are the only ones you can go to.

 

If you want other options, you need the insurer to include preferred workshops. That’ll let you use a workshop “off the list”, and still get your claim. But this option means higher premiums, and higher excess (the amount you’re liable to pay in an accident).

 

If you insist on a particular workshop, ask the mechanics for the insurers they work with. Pick the lowest premiums amongst that list of insurers. It’s usually cheaper than paying for preferred workshop options

 

 

6. Bargain the Excess

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The excess is the amount you’re liable to pay in an accident. Depending on your driving record, it’s open to negotiation.

 

Most insurers will lower your premiums if you accept higher excess. In other words, you’ll pay less per month, but more during an accident. Overall, this favours the motorist: Most people pay much more for premiums (every month) than for accident repairs (once every few years).

 

Most insurance agents will don’t raise the option, so ask for it. Assuming you’re a decent driver, this could save you big sums in the long run.

 

 

 

 

 

 

Article credit to Ryan Ong posted on http://www.moneysmart.sg/car-insurance/5-ways-to-lower-your-car-insurance-in-singapore/