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Old 13-10-2008, 04:58 PM   #1
X66
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Things you need to know about car insurance

From time to time, there will be people in the forum asking for car insurance recommendation. So I thought writing some info on car insurance so everyone has some idea of how car insurance work.


How premium is calculated

Premium is calculated base on the follow factors

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 actual driving experience. This is measured in number of years

0 to 1 - super super expensive
1 to 2 - super expensive
2 to 4 - quite expensive
more than 4 - safe zone (most insurance company charge lowest rate for 4 years of driving experience, though some company 3rd year will give the lowest rate - eg. 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 that you can get 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 is application to people with 50% NCB, in the event of 1st accident in that policy year, your NCB will remain as 50%. After which, the 2nd accident will cause your NCB to be reduce 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 cant get -10% so it will be 0%)

It is important to note that NCB protector is only effective 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 offense or demerit point for the past 2 years. You only get this additional 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 $1423 {[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 generally means the year which your car is made/register. Generally, the older the car, the cheaper the premium

9) Body Type This general means the type of car like saloon, MPV, SUV. Some company will charge more for certain type of vehcile

10) Engine Type This usually refers to normal 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 reject cars with turbo engine.

11) Gender This is company dependent. Some company charge cheaper for male driver while some company charge female cheaper. Yet for some other company is the same rate. I think it's base on individual company statics.

11) OPC Car OPC also know as Off peak car (red plate). Some company give 5% discount for OPC (eg. NTUC) while other company gives same treatment.

Finding the cheapest car insurance

Please note that there is no generalization that which company gives the most competitive car insurance rate. This is because some company may specialist in Japanese car, some company may have better rates for smaller cc class.

Moreover, the rates of car insurance changes every 6 to 12 months, so it may happened that this year company A is cheap but next year renewal, company B is cheaper. Hence, my take on this just quote every year or you find someone you trust to quote several company for you every year.

Most of the time, you should get a decent good quotation after 5 companies. If you really really want to cheapest, then really have to quote all 20 over insurance company

These are the website that some of my friends use

sgcarinsurance.net

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

This is especially true for this year especially when there's 2 raise in premium by almost all insurance company

Eg,
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 $1348.20 {[2800 - (2800 *55)] * 1.07} with GST.

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

I never claim before why should I pay more premium (especially for those max at 55% NCB

This one I also cannot help you. Best if buying insurance is not compulsory for you then you dun need to buy. You should ask this question to your Ah Gong

That's all for the time being, will post more on claim procedure and other useful information by editing this post. Feedback are welcome. Thanks all.
PSP1_Geek, Crescy and Lostinmotion like this.

Last edited by X66; 02-03-2009 at 08:12 AM..
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Old 13-10-2008, 05:02 PM   #2
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does the gender plays a part as well?
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Old 13-10-2008, 05:15 PM   #3
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does the gender plays a part as well?
Good point, it's company dependent if I am correct, some company male cheaper while some company female cheaper and some company is the same. I think it's base on individual company statics.

It also reminds me of OPC cars, some company like NTUC give 5% discount for OPC while other company gives same treatment. Updated on 1st post
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Old 13-10-2008, 05:20 PM   #4
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good info.
i vote for sticky.
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Old 13-10-2008, 05:44 PM   #5
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Nice effort there. Prehaps can have a list of motor insurance companies for others to seek quotation from.
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Old 13-10-2008, 06:03 PM   #6
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Good info.
While i was going through my car insurance i was told female driver insurance is cheaper (female are less risk taker than male, please note they use word less).
Although i have personally saw a few lady drivers driving worst/dangerous than male drivers.
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Old 13-10-2008, 06:21 PM   #7
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Good info.
While i was going through my car insurance i was told female driver insurance is cheaper (female are less risk taker than male, please note they use word less).
Although i have personally saw a few lady drivers driving worst/dangerous than male drivers.
Good info.

Good sticky.

My friend just been quoted 3.1K with 10% NCD. Last year he was only paying 2.7K. Think mine next year will be rocket high.
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Old 13-10-2008, 09:33 PM   #8
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2-door vs 4-door - 2-doors are perceived to be sports car, higher premium.

colours - i was told Red colours are perceived to be sports car, higher premium. dono how true? if true, quite ridiculous. lame excuse by the insurance co to earn more.
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Old 13-10-2008, 11:23 PM   #9
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2-door vs 4-door - 2-doors are perceived to be sports car, higher premium.
I think what insurance company do these days is that they already mark certain car models. Like RX8 4 Door and low cc they still will charge high premium. So i think it's more models dependent these days.

colours - i was told Red colours are perceived to be sports car, higher premium. dono how true? if true, quite ridiculous. lame excuse by the insurance co to earn more.
I am 99.9% sure insurance company do not price their car in terms of colour the last few years. No sure about many years back (> 8 years) though
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Old 16-10-2008, 11:06 PM   #10
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What you mentioned covered third party??

Eg Insurance under my mother but I driving the car??
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Old 17-10-2008, 03:39 AM   #11
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What you mentioned covered third party??

Eg Insurance under my mother but I driving the car??
Car insurance will also cover other drivers driving the car as long as he or she is authorized to driver by the car owner. However, the excess may be different.

In your example, assuming a mother's (car owner) excess is $500 and her son is less than 25 year old. If he causes an accident, the insurance company will pay the claim but excess may go up to $2000 as he is a young driver.

In the same example, if the father (assuming he has similar driving experience and in the same age group as the mother) causes the accident, the insurance company will still pay the claim and the excess will likely be the same as $500.

Hence in conclusion, insurance will still pay upon accident, just that the excess maybe different. Hope it helps.
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Old 17-10-2008, 03:31 PM   #12
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What you mentioned covered third party??

Eg Insurance under my mother but I driving the car??
drive carefully,or should I say do not claim, then can use parents name to buy and save
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Old 17-10-2008, 06:52 PM   #13
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very Good POSt!!! Hope to hear more from you!
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Old 18-10-2008, 08:49 AM   #14
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drive carefully,or should I say do not claim, then can use parents name to buy and save
Ya, drive carefully is still the best, low accident rate insurance company then will stop increasing our car insurance. Getting carzy these days!

very Good POSt!!! Hope to hear more from you!
Thanks!
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Old 21-10-2008, 02:44 PM   #15
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Anyone knows why convertible hardtop insurance is as high as softtop?

Gen
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