5 Things To Look Out For When Buying Car Insurance
After having invested so much money into buying a car, all drivers would want to take up appropriate car insurance to protect themselves as well as their new acquisition. There are a number of different factors that can affect your car premium – age of driver, driving experience, type of coverage and even the car model. Because of this variety of factors, the premiums you pay for car insurance can vary from one person to another.
Moreover, it is mandatory in Singapore for any car-owners to take out car insurance. So here’s our guide on what to look out for when choosing a car insurance policy:
1. Type of car insurance coverage
Quite similar to buying personal insurance for health or life, there are different types of coverage you can get with car insurance. In Singapore, the minimum requirement is to cover third-party liability; this covers liability claims from third parties for damage and injury caused by your car to their vehicle. Most drivers opt for comprehensive’ coverage, which also covers damage to your own car during an accident, as well as those caused by fire and insurance against theft. A sample comprehensive insurance coverage would typically include the following:
- Death or injury to other parties
- Damage to other parties’ property
- Fire damage to your vehicle
- Theft of your vehicle
- Damage to your vehicle caused by an accident
- Personal accident cover
- Medical expenses
You can also take on optional coverage or riders to increase the number of benefits you can get. However, these usually come at an extra cost. Some optional coverage includes:
- Windscreen damage
- Damage arising from riot, strike and civil commotion
- Damage arising from flood
- Personal accident benefits for passengers
- Replacement car benefit
- Additional excess
- No-Claim Discount protection
Many of us who are looking at car insurance might look out for the cheapest option, thus rendering these optional benefits as irrelevant. However, if you shift your perspective to think about how insurance can protect you, you might want to weigh up your priorities for coverage. In fact, you may find that some of these additional items can become very important in the long run.
2. Car Insurance Policy Excess
An excess, also called deductible, is the amount you need to pay before the insurer pays the remaining of your repair bill. The excess level differs across insurers but the general rule of thumb is that the higher the excess, the lower the premium. Some people prefer to keep their excess high to enjoy lower premiums, but it can be painful for your pocket in case of an accident since you will have to shoulder the high excess.
If there are other family members using the same vehicle, you might want to include their names in the policy so that the insurance is valid during a claim. Do also note that your driving experience and those who are using your car can play a part in determining your premiums.
4. The model of your car
The type and model of your vehicle will lead to a different insurance premium. This is due to the general safety features of the car, the part replacement and repair cost and performance level of the vehicle. Generally, high-end cars such as BMW, Audi and Porche all command a higher premium than your normal Toyota and Honda cars.
5. No Claims Discount
A No Claims Discount (NCD) is a discount is awarded to a car driver for a clean driving record for the past year. The longer you do not make a claim, the greater the discount because you are considered as a safer driver. This is a great incentive for drivers to drive safely on the road, and NCDs can go up to 50% if you maintain a good driving record with no claims for 5 years and above!