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3 Ways to Avoid Paying More For Your Car Insurance Policy

Owning a car in Singapore already costs you enough to buy a landed property in other nations. So why suffer any further indignity by paying more than you should on car insurance?

I get it. You’ve already suffered enough financial trauma from your purchase (COE, ERP, ARF, ARRRGHHHH!) to desensitize you from the pain of overspending. Unfortunately, by the time your shellshock wears off, you may have wasted hundreds or thousands of dollars on a bad car insurance policy.

Here are several ways to avoid getting financially shafted by your insurance policy:

1. Avoid the Middleman

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2255094696_469284189a

And you thought that cup of coffee your insurance agent bought you was free…

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There’s really only two ways to buy car insurance. You can either purchase it through an agent or directly from the insurance company.

So what’s the difference between the two?

For starters, you can meet face-to-face with an agent, discuss the English Premier League over coffee, and pay about 20%-30% more for your car insurance over buying direct from an insurer. Now that’s one expensive cup of coffee!

Agents will help you go over your policy to save money, but the truth is that you can do that yourself if you know how to lower your insurance premium. By buying directly from insurers, you can get the same savings an agent would get you, minus the 20%-30% commission markup.

Also, unlike agents who have “normal” operating hours, you can buy car insurance directly online 24/7 without having to wait for your quote. Further down, we also look at how you can optimise this process as well to get more information without going to multiple sources.

2. Avoid Too Much “Excess”

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107759244_cdbce918ac

A lower excess can protect you from getting shafted by “excessive” damage.

The “excess” on your car insurance policy determines how much you must pay an insurer before you can claim the full amount you’re insured for. This makes a huge difference in how much your monthly premiums will be – because the higher your excess, the lower your monthly payments will be.

That’s good news right?

Well, yes and no. You’ll save more on your monthly payments – the catch is that you’ll need to shoulder more of the financial risk in the event of an accident.

For example, if your excess is $2,000 and you get into an accident that leaves your car looking like a modern art disaster with a $$2,500 repair bill – you’re on the hook for $2K while your insurer only pays the remaining $500. But if your excess was $500, that $2K bill would be on your insurer.

So the moral of the story is this – if you drive daily through congested areas such as the Central Business District (CBD) where the odds of getting into an accident are high (not sure why people tend to be more antsy there), lowering your excess can save you big time!

3. Avoid Being Too Comfortable

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453339702_1dc659e082

Ah, the moment you realize that you’ve been overpaying on your car insurance.

If you’ve used the same car insurer for years without either evaluating your policy or shopping around for quotes from other insurers – there’s a chance you might have already overpaid hundreds or even thousands of dollars, especially if you purchased through an agent.

It’s easy to get “comfortable” with your current insurer and assume that you’re getting a good deal. But even with an insurer’s renewal discount (if you get one), you might still be paying more than you realize.

For example, insurer A provides coverage for every kind of driver (even the bad ones), charging more on monthly premiums than insurer B, who’s very selective and only insures “safe” drivers. And if you’re a safe driver with insurer A, you’re basically paying more each month to cover drivers who can’t go a year or two without an accident.

Instead, shop around for quotes so you can find a better policy that offers better rates, benefits, and renewal discounts. Or better yet, just visit Smartinsurance.sg so you can compare and save on car insurance.

Important Note: Before choosing a car insurance policy, make sure you’re knowledgeable about any restrictions, discounts, and penalties/refunds that come with it. Thankfully, we have articles on what to look for in car insurance and how to lower your premiums.

And make sure you bring up any safe driving discounts you have such as the No-Claim Discount (NCD) and Certificate of Merit (COM) to your insurer so you can include it in your policy!

Do you have a bad car insurance story to tell? Share your thoughts with us on Facebook!

Image Credits: msnyc111, :: shodan ::, HexBlock

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