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Car Insurance Singapore

Factors affecting car insurance premium

1) Age Group This is car owner’s age. Most company has similar age group factor

18 to 21 – super expensive
21 to 25 – quite expensive
26 to 30 – a bit expensive
31 to 65 – safe zone

2) Driving Experience This refers to how long did you get your driving license and has nothing to with the actual driving experience. This is measured in number of years

0 to 1 – extremely expensive
1 to 2 – super expensive
2 to 4 – quite expensive
more than 4 – safe zone (most insurance companies charge the lowest rate for four years of driving experience, though some company 3rd year will give the lowest rate – e.g. OAC under Great Eastern)

3) Job occupation (Indoor/Outdoor) This refers to the nature of work, like desk-bound or sales

Indoor – cheaper
Outdoor – more expensive
So far, I have only heard of a company that charge the same rate for indoor and outdoor occupation as of Oct 2008. It’s Mitsui Sumitomo.

4) NCB Discount No Claim Bonus discount, some may call it NCD (No-claims Discount) You get 10% NCB every year if you do not have any accident. The maximum NCB is 50%.

For example, your car insurance cost $2000 (before NCB) and you have 40% NCB, your premium would be $1284 {[2000 – (2000 * 40)] * 1.07} with GST. Hence the higher the NCB, the lower your premium

5) NCB Protector This applies to people with 40% or 50% NCB. In the event of 1st accident within the policy year, your NCB will remain as 50%. After which, the 2nd accident will cause your NCB to be reduced to 20% (50% – 30%). If you super unlucky and have the 3rd accident in a year your NCB will be reduced to 0% (20% – 30%, you can’t get -10% so it will be 0%)

It is important to note that NCB protector is only valid if you renew your car insurance with the same insurance company. If my car insurance is with company A and my NCB is 50%, after the 1st accident (and it’s my fault), I still get 50% NCD as I got the NCB protector upon the renewal. However, instead of renewing my insurance with company A, I go with company B. I will only be entitled to 20% NCB.

6) Safe Driver Discount This is an additional 5% discount if you do not have any traffic offence or demerit point for the past two years. You only get this extra 5% when you have minimum 30% NCB.

For example, your car insurance cost $2000 (before NCB), and you have 30% NCB and safe driver discount, you premium would be $1391 {[2000 – (2000 * 30)] *0.95 * 1.07} with GST.

7) Engine Capacity (cc) This refers to your car engine in cc. The lower the cc, the lower the premium

8) Year of Manufacture This means the year that your car is made/register. The older the car, the cheaper the premium

9) Body Type This general says the type of car like a saloon, MPV, SUV. Some company will charge more for a particular type of vehicle

10) Engine Type This usually refers to standard or turbo car engine, It’s important to know that most car insurance company impose higher car insurance premium on turbo cars. Some insurance even rejects cars with a turbo engine.

11) Gender This is insurer dependent. Some company has favourable rates for male driver and some give favourable rates for the female drivers. For some other company is the same rate. My guess is that it is based on individual company statics.

11) OPC Car stands for the off-peak car (red plate). Some company gives 5% discount for OPC (e.g. NTUC) while another company gives the same treatment.

Why my NCB increase + and now I have 5% Safe Driver Discount, but my premium is still higher than last year? 

This is especially true for this year especially when there’s a raise in premium by almost all insurance company

Year 2007, 40% NCB, Base premium $2000, the final premium for 2007 is $1284 {[2000 – (2000 * 40%)] * 1.07} with GST.

Year 2008 50% NCB + 5% Safe Driver Discount, but the base premium is increase to $2800, the final premium for 2008 is $1423.10 {[2800 – (2800 *50)] *.95 * 1.07} with GST.

Hence, you see higher renewal premium even though you have more NCB

Finding the cheapest car insurance

There is no generalisation that which company gives the most competitive car insurance rate. This is because some company may specialise in the Japanese vehicle while other may have better rates for smaller cc class.

Moreover, the rates of car insurance change every 6 to 12 months, so it may happen that this year company A is cheap but next year renewal, company B is cheaper. Hence, our advice is to let us quote several companies for you every year =)

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