Monday, July 17, 2017

8 things to consider when buying car insurance (not enough people think about No. 3)

Not sure how to go about buying car insurance? Or confused over what to consider when buying auto insurance? Below is a simple guide to help you in your search for the most suitable motor insurance that is cheap and value for money given the different factors insurance companies consider that will affect your premiums, some of which you can control. 

8 factors to think about before purchasing your car insurance: 

1. Desired insurance coverage

Based on Singapore’s laws, the minimum requirement is to cover third-party liability

To also cover the damage to your own car, you will require comprehensive coverage. While premiums are higher, this is often the choice of most drivers.

2. Add-on insurance coverage

Add-on coverage such as a replacement car feature or a transport allowance rider may be offered by some general insurers. Do note that there will be differences in the maximum number of days that insurance companies will reimburse you for transport or provide a replacement car, as well as the type of replacement car or amount of reimbursement.

3. Insurance policy excess

An excess, also called deductible, is the amount you would have to fork out first before the insurance policy starts to kick in and contribute to your repair bill. The excess level offered will differ from insurer to insurer – you should check that you are comfortable with the amount. 

You can also choose different excess amounts in your search for auto insurance quotations that suit your budget. Some people prefer to keep their excess high to enjoy lower premiums, while others want to keep it as low as possible in case of minor accidents, which results in higher premiums.

4. Other named drivers

You can choose to cover only yourself, specific named drivers, or any drivers in your car insurance policy. The number of drivers and their driving experience may play a part to determine your premiums. But do note, there may be extra conditions for young and/or inexperienced drivers if they are not named drivers in the event an accident occurs.

5. Make and model of your car

Each vehicle type will lead to a different price for your car insurance premium. Vehicles with expensive spare parts often translate to higher insurance premiums because insurance companies are undertaking the risk of a higher cost of repair in the event of an accident.

6. Usage of vehicle

Insurers typically see a higher risk in individuals who need to drive in their course of work because they are on the road more and are exposed to a higher likelihood of an accident.

Hence, insurance companies will ask if the vehicle is used for day-to-day transportation such as commuting to work and moving from point A to point B, or if it’s a necessity in the course of your work, for instance an outdoor sales job. 

7. No Claims Discount (NCD)

No Claims Discount (NCD) is a discount awarded annually by your insurance company if you have not made any claim on your existing car insurance. If you don’t make a claim, this shows you’re a safer driver, and it is factored in to the price. The discount can be used even if you decide to switch insurance companies in your next car insurance renewal. 

You can, however, pay extra to protect your No Claims Discount (NCD) and reduce the impact that a future claim would have on your next renewal price.

8. Claims history

While safe drivers enjoy No Claims Discounts (NCD) that can translate into significant savings on insurance premiums, the more accident-prone a driver is, the higher the insurance premiums will be, due to the perceived increased likelihood of getting into an accident again. 

Bonus - track your driving, get further discounts

Think you are a safe driver? Some general insurance companies now offer to install devices in your car or using an app through your mobile phone to monitor your driving patterns and habits. And if you are found to be a safe driver, they will give you additional discounts. 

* Shop for your car insurance *

These days, shopping around for car insurance quotes is easy thanks to the Internet. You can easily find and compare motor insurance online. 

Read more about it:

 Shop for Cheap Car Insurance Quotes

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