Yahoo Finance The 3 Cheapest Car Insurance Policies in Singapore 2017
Getting a car in Singapore is a bit like having a fancy dinner. No matter how much you’re mentally prepared to spend money, when you see prices on the menu you’re still a little shocked at how much you must pay. That’s usually when your eyes scan for the cheapest thing on the menu and you order that, hoping no one questions your decision.
In Singapore, we’re a little like that when it comes to car insurance. After all, when you’ve just spent so much on the vehicle itself, just getting the cheapest car insurance should be fine, right? Well, we’ll see:
Here are the 3 cheapest car insurance policies in Singapore:
But first, we need to define our driver…
Car insurance policy premiums differ based on several factors like age, driving experience and car model. In getting quotes from insurance providers, we gave them the following driver profile:
27 year old male
Married
5 years driving experience
no prior claims, No-Claim Discount of 50%
drives a 2-year-old Toyota Corolla Altis 1.6 with no mods
Wondering why we picked this profile? Because this is what most insurance companies would consider a “safe” driver in Singapore, and thus be quoted the lowest premiums. That said, you may be surprised to find out that some insurance companies consider women “safer” drivers than men.
Based on the above profile, here are the lowest quotes:
Insurance Provider | Quoted Annual Premium / Excess |
Budget Direct | $842.85 (including GST) / $600 |
DirectAsia Value Plan | $879.73 (including GST) / $800 |
FWD Classic | $919.39 (including GST) / $500 (after discount*) |
*Note: FWD is currently running a 20% discount with code “SG52”
No, I’m not kidding. Those are the lowest prices for car insurance in Singapore, and it’s only because the driver profile we picked was so ideal. But here’s the thing – just because a company can quote you a low annual premium for your car insurance policy doesn’t mean you should go with it. There’s no point saving on your premium, only to end up paying more over time.
Here’s why lowest premium isn’t always best:
1. The higher your excess, the lower your premium
When you make a car insurance claim, the excess amount is basically what you must cough up first before your insurance provider pays the rest. If your claims are $500 and your excess is $500, as in the case of FWD Singapore above, too bad, you’re going to have to pay the full claim out of your own pocket. There’s nothing wrong with going for a higher excess if you’re generally a safe driver – but say a short prayer before hitting that ignition button that you’ll stay incident-free on the roads.
Fortunately, some insurance companies, like AXA, allow you to customise your car insurance plan. This means you can choose to lower or increase your excess, which then leads to a higher or lower premium respectively. You can also choose to add or remove additional benefits – so if you have no problems bringing your car exclusively to one of AXA’s authorised workshops, for example, you can effectively pay a lower premium compared to someone who insists on being able to cover a workshop of their choice.
2. Your No-Claim Discount is your saviour
Can you imagine having to pay double your car insurance premiums? That’s a reality for someone who unfortunately makes one too many claims in a year after painstakingly building up their No-Claim Discount to 50%. But the fact is, most insurers offer you what is known as a No-Claim Discount Protector, which you pay for, but allows you make one claim before reducing your NCD.
Companies like FWD Singapore, on the other hand, offer you an unbeatable Lifetime No-Claim Discount Protector when you achieve 50%. This is unprecedented in the market, and effectively keeps your premiums low for life. And considering that FWD Singapore is already offering one of the lowest premiums, having a Lifetime No-Claim Discount Protector is just icing on the cake.
3. Always, always read the fine print
No two car insurance policies are exactly alike and it’s important to make sure you understand where they differ. Yes, for the most part the coverage is comparable, but sometimes insurers like to play around with definitions. For example, one would think that modifying your vehicle is okay, if it’s an LTA-approved modification, right? Wrong.
It’s not like you’re outfitting your vehicle with booster rockets – you’re just changing the rims of your tyres because you like the design. According to some insurance companies, that’s as good as turning your car into an extra on the Fast and the Furious film franchise.
These insurance companies take their fine print very seriously – so when they say modifications may void your policy, you better ask them what they mean by modifications.
Looking for the best car insurance policies in Singapore? Get quotes online through MoneySmart’s Car Insurance Wizard.
The post The 3 Cheapest Car Insurance Policies in Singapore 2017 appeared first on the MoneySmart blog.
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