14 Jul How to reduce your car insurance premium
Wonder how car insurance premiums are calculated in Singapore?
It can be confusing trying to figure out how car premiums are calculated and how you can get a cheaper deal on yours. We went behind-the-scenes to collate this information for you. Here are the factors that insurance companies generally consider before working out how much you will pay.
YOLO? Think again!
You may be a young driver full of dreams and hopes for the future, but hit the brakes for a second. Insurance companies usually consider the age and driving history of applicants before determining premiums. So do not drive beyond speed limits and disregard traffic rules as this might indicate a higher risk of accident, and you might have to pay a hefty premium.
On the flip side, the good guys out there above 24 years old who have held their licence for at least two years and have a clean record are generally considered to be lower-risk drivers. Not to be a spoilsport, but yes, that means no licence cancellations or suspensions in the last three years.
This is where it gets even more interesting. If you have other drivers on your policy, it is best to choose very carefully whom you allow to drive your precious vehicle, as this can affect your premium to a certain extent. You may even have to pay an excess if a young, inexperienced or unnamed driver has an accident while driving your vehicle.
Think before you claim
This might seem like common sense, but hear us out anyway – drivers who make lots of insurance claims will generally pay higher premiums than others.
Specifically, those who have had a higher claims history in the last three years are considered higher-risk drivers and will need to fork out more for their premiums. This is based on the assumption that the policyholder is likely to make another claim in the short term.
Hopefully this does not apply to you, but if you have ever been denied insurance, made fraudulent claims or had a policy cancelled with another provider, you may either be refused cover or have to pay a higher rate than others. On the contrary, not having any experience with these scenarios can put you in good standing with your insurer.
A higher value car can also be more expensive to repair than a lower value car, and will likely affect your premium.
Dude, where is your car?
The make and features of a vehicle could be something to spend long hours chatting with friends about, but they could also indicate its probability of being stolen, in turn affecting the premium you pay.
However, you may be able to reduce your premium by protecting your car from the risk of theft by ensuring your vehicle has an alarm, locking system, theft code or other security features. Some features are, of course, standard, but if your car is an older model, you may wish to install an anti-theft device.
The rules of the game are different when your car is meant for personal use instead of commercial purposes such as hiring, renting and leasing. Your premium will be lower if your vehicle is used privately.
If you (literally) take the road less travelled…
If you are a light user, there is no reason you should pay a costly premium. With usage-based insurance, you can be assured you will pay as per your lower mileage only.
Shirley Tan, Head of Marketing & Customer Experience for Etiqa Insurance, says:
We are focused on using technology such as telematics to meet the unique needs of individuals. With our ePROTECT sMiles, a low-mileage user can save up to 50 per cent upfront.
So now that you know how your premium can be lowered, think about how you use your vehicle, who drives it and how you can protect it when you take on insurance cover. We also suggest you find the right car insurance, depending on whether you are a standard driver or low-mileage driver, and get a quote today.