A high quality lifestyle isn’t achieved by just dreaming. It needs to be worked on. If you are a car owner, or someone who dreams of buying a car, I bet that hearing the words ‘car insurance’ hurts a lot. Words like costly, or it’s just a waste of money pops into your head upfront!
Maybe because when investing in a car insurance, the profit or gain cannot be acquired immediately and you might feel like insurances like this makes your assets depreciate. Here is where we come in, let us help you understand why car insurance is significant, and why is it not a scam.
What Is Car Insurance?
Car insurance is not for mechanical repairs. If the damage of your car is related to mechanical repairs, you have to shoulder the expenses by yourself, or if you still have a warranty, then you may use it. It cannot also be used to cover expenses for exterior damages such as the tearing of your car’s paint.
It is clearly for accidental occurrences like collision, fire, theft, vandalism, or storm damages. It is your protection for the unthinkable situations because without it, you could face a serious financial situation, and that is a black hole of life that you wouldn’t wish to be in.
Why Do I Need Car Insurance?
Accidents happen almost all the time. Like earthquakes, we cannot predict when will it happen and there isn’t any tool to determine its impact and damage, physically, emotionally, mentally, and financially.
There isn’t an immunity that covers us and prevents it from happening too. It is a sad reality that we must face and live on If you are still not convinced to get a car insurance, hear the numbers talk.
In the latest data collected by Best Car Insurance Singapore, there were 7,690 recorded accidents that turned into injuries that has occurred in Singapore.
There are 120 people killed in traffic accidents in 2018. Elderly pedestrians accounted for two-thirds of all pedestrian fatalities (1 in 2 accidents involving elderly pedestrians was due to jaywalking).
Motorcyclists and pillion riders account for about 1 in 2 of overall road fatalities. Seventy-three percent (73%) of heavy vehicle drivers speed when traffic is light. And for the last blow, Singapore’s road fatality rate of 2.73 per 100,000 citizens is higher than London, Hong Kong and Tokyo.
With the alarming rise of these numbers, how sure are you that you wouldn’t be involved in one, for years?
If you’d ask, what are your options to prevent this hassle from happening, then I’ve got an answer for you.
Get your car insured!
If you really have doubts in getting it, this reason might completely turn the table for you.
You want to know what it is?
In Singapore…
It. Is. Mandatory.
Types Of Car Insurance:
Car insurance can pay for the repair of physical damages brought to your car by an accident. In Singapore, there are only three types of insurance:
Third Party Only (TPO)
This type of insurance only covers damages or expenses that you caused to another person. For example, while you were driving, you bumped in a lamp post and of course it got broken.
If you have TPO, the insurance company will shoulder the repair or replacement of the lamp post and will make the necessary actions.
If in the instance of collision to the lamp post, your car was also damaged, then you will shoulder the expenses of repairs or replacements since you only have Third Party Coverage. This is also the most affordable car insurance coverage.
Companies like Direct Asia, Axa, and Kwiksure are your best options when you want to purchase TPC.
Third Party, Fire and Theft
This is a coverage on top of Third Party Only Coverage. But unlike TPO, this coverage applies to your own car. As the name suggests, your car is also insured when an unexpected fire happens, or when someone steals something from your car.
Comprehensive Cover
This coverage offers the widest protection for the insured car. Some includes protection against liability to third parties (including passengers) for bodily injury or death, property damage to third parties, damages and losses resulting from fire and theft, damages and losses to your own vehicle, no Claims Discount (NCD) protection, personal accident and medical expenses cover, vehicle towing, windscreen damage etc.,
Factors That Affect Car Insurance Cost
In the adverse effects of globalization nowadays, who wouldn’t want to have the best insurance at the lowest cost? Of course we know what you feel and before we talk about the cheapest car insurance plans, we will first discuss the factors that affect the cost of these insurance plans according to SG Car Mart.
Age Of Vehicle
The cost to insure older vehicles is much lower due to the availability of aftermarket/used parts. While newer car parts are generally more expensive to replace.
Engine Capacity
The larger the engine capacity, the higher the cost of your premium. Vehicles with higher capacity tend to be more expensive; incurring higher cost in repairs.
Type and model of vehicle
Coupes and turbocharged cars are often expensive to insure for similar reasons, expensive car – expensive premium. Off-peak cars would cost less, being that they spend less time on the road, thus lowering the risk of an accident.
Driver’s Personal Details
The driver’s age, gender, driving experience, occupation and past records will also be considered.
Those below the age of 26 pay a significantly higher premium than older drivers because in the eyes of the insurer, younger drivers tend to be hot-headed and reckless.
Driving Experience
Inexperienced drivers with less than two years of driving experience are charged heavily for premiums as well, because they are more susceptible to accidents on the road.
Gender
Car insurance prices are also based heavily on gender. Women are seen to be safer drivers and would, therefore, receive a lower quote for premiums.
Terminologies you need to know before purchasing a car insurance
Insurance Premium
This is the amount that you pay for yearly coverage and is highly dependent on the factors that affect the cost of a car insurance
NCD or No Claims Discount
This is the discount that you get if you don’t process a claim in a year. So as long as you do not get in trouble, your No Claims Discount increases up to fifty percent! It automatically kicks in when you renew your insurance. On the first year you’ll have 10 and it increases yearly up to your fifth year which is 50 percent.
FWD, a car insurance company offers a promo wherein their clients could keep their NCD for life! Plus, anyone who he trusts to drive his car is automatically insured too.
Excess Or Deductible
This is the amount you pay upfront before the insurance company pay for the remaining amount. Insurance companies use deductibles to ensure policyholders have “skin in the game” and will share the cost of any claims.
Certificate Of Merit
This entitles a driver to a five percent discount on insurance premiums on top of their no-claim bonus. Upon achieving three straight demerit-point free years, a driver is eligible for a COM at the point of purchase/renewal of the car insurance.
What Are The Best Car Insurers in Singapore?
According to HM Insurance Consultancy, it is advisable to get comprehensive insurance coverage since it provides not only third-party coverage but also damage done to yourself when you are the party at fault in an accident. It is compulsory to get comprehensive insurance coverage for drivers who are still financing their cars.
Cars and car insurances are pretty expensive in Singapore so you better get loyalty discounts for staying with the company for a long time. And although it is required for you to get your car insured, always remember that driving safe doesn’t hurt. To learn more about Car Insurance in Singapore, you can check their article and download the Car Insurance Guide to get started and learn about the cheapest car insurance for your needs.
You have a family waiting for you to come home.
Drive safe.
