Car Insurance FAQs

Recently due to the high claims in Motor Insurance the premium have went up substantially, therefore, your current insurer might not be able to give you a competitive rate and with us helping you we are confident we can do better than your current insurer and help you to save money on your motor insurance.


Tentatively 1 month in advance is advisable so that you have ample time to renew your Road Tax and car inspection if you need to.


Insurers offer three main types of motor insurance policies. Optional benefits are available to meet your individual needs.
There are 3 types of motor insurance

Comprehensive Cover
Covers repair or replacement of your vehicle if it is damaged or lost as a result of theft, accident, vandalism or weather-related damage. It also covers accidental loss or damage to your car, its spare parts and accessories and liability of claims from third parties for damage to property and people.

Third Party, Fire and Theft Cover
Besides covering injury and damage caused by your vehicle to someone else's vehicle or property, it also covers your vehicle if it is stolen or damaged by fire.

Third Party Cover
Covers liability claims from third parties for injury and damage to their vehicle or property caused by your vehicle. It is advisable to cover under Comprehensive due to the fact that it covers not only Third Party coverage but your own damage when you are at fault due to an accident.


You will be paying directly to the insurance companies that you decide to take up after giving you the comparison.


You can choose to renew it through Online Banking, AXS machine and Singapore Post Office.


Excess, also called deductible, is to the first amount of the claim which the insured has bear. If the insured has an excess of $500 and the total repair costs $3,000, then the insured has to pay $500 while the insurer pays the remaining $2,500.


By having a lower excess will result in paying higher for the premium. However, certain insurance companies will waive off your excess if you enjoy 40%-50% NCD. Therefore, it depends on the offering of the insurance companies, therefore, should seek for insurer who offer low excess but yet competitive premium.


The insurer normally imposes some excess as this would serve as a form of co-insurance. With an excess, the insured would tend to be more careful because if a claims occur, the insured also has to be out of pocket and contribute towards the claim. In general, the higher the excess, the more careful would be the insured and hence the lower risk of having a claim.


Your insurance policy is divided into many sections. Section 1 normally covers own damage claim. When you buy a Comprehensive motor insurance policy, you are covered for own damage, ie if your own vehicle is damaged, you can get the insurer to pay for the damage, whether or not you are at fault.

Thus, Excess: $500 (Section 1 only) means the excess applies to an own damage claim only. Take this scenario: If the insured hits another vehicle and his own vehicle's damage is $6,000 and the third party's damage is $8,000, then the excess of $500 shall only apply to his own damage, ie he pays $500 and the insurer pays $5,500 for his own damage of $6,000. For the third party claim, the insurer would pay the full amount of $8,000.


Section 2 in the policy, on the other hand, deals with third party claims. So if there is an excess on Section 2 as well, it means if there is any third party claim payable this excess shall apply. Using the same example above, the insurer pays $500 and the insurer pays $5,500 for his own damage of $6,000. For the third party claim, the insured has to fork out also $500 while insurer would pay $7,500 for a claim of $8,000.


It means the total excess applicable for every accident. Using the same example above, the insured pays an excess $500 while the insurer pays $13,500 (the sum total of $6,000 and $8,000, less the excess of $500).


No. Such excess is not common. The insurer would normally impose such excess for special cases, eg when the vehicle is a high performance or luxury vehicle or when the insured's profile is not favourable


If you have not made any claims for a year or more, you are entitled to a No-Claim Discount (NCD). The NCD reduces the policy premium for the following year. This is your insurer's way of recognising you for having been a careful driver. The following table shows how the NCD is set by all insurers across the industry.

Claims during the period of insurance NCD on renewal
1
2
3 or more
50%
20%
Nil

Please check with your insurer whether NCD cover is available.


Before making any claims:
If the total repair costs incurred is likely to be lower than the current discounts/rebates on your premium (also known as No Claim Discount), it is advisable not to claim the repair cost from your insurance. You are better off paying for the repairs yourself in the long run.
Refer to the following table to know how much discount on the premium you get to enjoy after you have made any claims.

Private car policies Commercial vehicle and motorcycle policies
Period of insurance with no claim Discount on renewal Period of insurance with no claim Discount on renewal
1 year
2 years
3 years or longer
10%
20%
30%
40%
50%
1 year
2 years
3 years
4 years
5 years or longer
10%
15%
20%

Most insurers in Singapore will allow you to keep your NCD should there be a break in ownership for up to 24 months. Some insurers set the timeframe at 12 months. You should contact your insurer for details.


When the sum insured does not include the COE, the general practice is for insurers to offer a 5% discount off the basic premium computed from the market value of the vehicles.

This is because the sum insured does not impact the premium pricing as much as the public might think. Most insurance claims are for repairs rather than total loss. Therefore, the weightage given to premium pricing for the COE component is correspondingly lower since the bulk for the premiums charged goes towards paying partial loss.


An insurance company considers many things when calculating an insurance premium. Most premiums are based on basic third party cover with the cost of extras added on. The main thing that will determine the cost of your insurance is what you actually want to be covered for. The following are always taken into account:

Licence
Whether you are driving on a full or provisional licence makes a huge difference to the cost of your motor insurance premium. You can expect to pay hundreds more in extra, if you only have a provisional licence.

Size and age of car
The engine capacity and age of the car play a large part in determining the cost of your premium. The older the car, the more difficult it can be to insure. Many insurance companies believe that the older a car is, the more accident-prone it becomes. A new car is more expensive to replace than an old car and will cost more to insure. Likewise, the more powerful the car you drive, the more it will cost to insure.

Age of the driver
The young and the old represent high-risk categories and pay more for insurance.

Value of the car
The value of a car is taken into account for third party, fire and theft and for comprehensive insurance. What you have the car insured for, however, is not always what the insurance company will pay out in the event of a claim. In the event of the car being a write-off, the insurance company will only pay out what it feels the car is worth, which, more often than not, is less than the car is actually insured for. There is very little to gain by over-insuring a car and, equally, you should not under-insure it either.

Experience
All insurance companies will ask if you have ever had insurance in your own name before. If not, they will ask if you have ever driven under someone else's insurance without incident. This will be taken into account when calculating a premium. Insurance becomes less expensive with experience and a clean driving record.

Profession and use
Some professions are considered to be more at risk than others and will have a loading put onto their premium. What the car will actually be used for is also taken into account. A standard policy covers the vehicle for social, domestic and pleasure purposes, but not for the carriage of goods. If the car is being used for business, then a loading will apply. If the car is being used commercially, then an even higher loading will be imposed

Excess and extras
Most insurance policies contain some type of an excess clause. This means that the policyholder is liable for an agreed amount towards the cost (e.g., the first $550). The premium will cost more if this clause is taken out. It pays to shop around, because what might be considered an extra in one company (windscreen breakage, car hire in the event of the car being off the road, loss of personal effects, etc.) could be standard in another.

No claims bonuses
A no claims bonus is built up over the years and gives the policyholder a substantial reduction in the cost of his or her premiums. The ceiling for a no claims bonus is usually 50%, leaving someone who has never had a claim without it affecting your no claims bonus.


The premium for your motor insurance policy is calculated using certain risk factors such as vehicle model, capacity, driver's age among other factors.
Market value of the vehicle is not a direct risk factor as it does not influence the claims received from third parties for property damage and injuries.
Further, the repair costs for motor vehicles has increased over the years. Hence, there is a need to increase the premium to ensure a sustainable business.


Insurance is based on the concept of pooling of risks. If the overall claims experience is bad, premiums will be increased across the board for all motorists irrespective of whether a claim is made or not. However, the premium increase borne by those with a clean driving record will be lower than those with accident claims because the latter will have an additional loading on the claim and thereby pay even more


In Singapore, there are two types of motor insurance scheme. Authorised Workshop or Any Workshop. It is easy to understand that authorised workshop scheme has lower premium because the insurer has control of the repair cost. Most of the motor cars are covered under authorised scheme in Singapore. People usually opt for any workshop scheme because they have super model cars which can only be fixed in designated workshops.


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Car Insurance Glossary

Here are some Car Insurance terms for you.

The cost associated with the type of your car insurance plan – ranging from Third Party to Comprehensive – and can span from any specified period up to 1 year.
What you have to make in an incident where injury is involved or when the other party refuses a private settlement.
What you have to pay when making a claim, but only when you’re at fault. If your claim is $3,000 and your excess is $500, you’ll only fork out that $500 while your insurer pays the other $2,500.
A reward percentage off your premium if you’ve not made any claims from the year prior. With every year, NCD increases by 10% and this can accumulate up to 50%.
Workshops approved by your insurer to perform repairs, if your plan has such a restriction in the event of damage incurred. If you have a preferred workshop or just want to get your car fixed at the nearest place, seek a plan that allows it. However, these may demand higher premiums.

For more information buying insurance, types of cars and recommended repair workshops, read our blog here.
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Our dedicated team is on a mission to provide an effortless, streamlined process for obtaining car insurance. We provide a centralised service, which keeps your car insurance experience in Singapore as convenient and easy as possible. When you obtain an instant car insurance quote with us and pick a new plan from our suggestions, our service is more than just a once-off deal: we will contact you 3 months before your current car insurance plan expires and we will provide you with a comparison for your next car insurance deal! Browse our workshop directory to locate the best repair and servicing workshops or read our car advice to gain access to the latest information, news and advice.