Are you planning to buy car insurance? Well, this may not be an easy task especially if you want to get the most out of it. There are many information out there some of which are fact while others are merely myths. You need to familiarize yourself with all facts about car insurance in Singapore before deciding on your purchase. Here are the popular myths you should watch out;
1. Your insurance will cover full cost of the damage
When it is your first time acquiring insurance, you would expect the premium to cover everything if your car is involved in an accident. Owing to the deceptive name ‘comprehensive car insurance’, your insurer will cover all costs involved. All these are misconceptions.
Each insurance policy has additional costs known as the “standard excess” or “policy excess” which is deducted from your insurance claims. You will need to pay the policy excess before your insurer steps in for compensation. This policy excess is served to make sure you do not abuse your vehicle by being careless and or engaging in irresponsible drinking and driving.
In Singapore, the standard excess ranges between S$200 and S$2500. With the average cost I Singapore ranging from S$600 to S$1000, HL Assurance (HLAS) will charge S$700 before paying S$3500 as the outstanding cost for instance. The towing charges might have a maximum limit. HLAS will only pay for costs up to $500.
2. You will pay a higher as your car ages
Most people presume that the car insurance premium increases, as the car gets older. On an average occasion, the cost of car insurance is at its highest when the car is still new. This will gradually decrease with age. At 10, the cost begins to rise gradually. This however may not be the case; every car insurance company has its own preference.
As a car rides down past 10 years, some insurers choose to decrease the price or hold them constant. They base this on the mileage covered by the car in question. In the same way, others will increase as it begins to age past ten. In this context, the rate of increase varies with individuals where one may choose to increase at a higher rate or at a lower rate depending on their set policy.
3. Women are charged more premium
As a popular perception, people view women as poor drivers compared to men. Based on this baseless stereotype, one would expect them to pay more for car insurance since they are more likely to cause an accident.
On the contrary, insurance companies consider men too expensive to insure compared to women. Statistically, their life habits are more risky and are prone to causing accidents. Based on data obtained from 2015 on insurance claims, men were 1.4 times more likely to cause accidents compared to women of the same profile.
4. Red cars demand higher insurance premium
As the urban legend goes, red cars are pulled over more frequently. Basing their judgment on this, a myth-monger would convince you that acquiring insurance on your red car would cost you more. However how visible to the police your red car would be, and the legend practically true, this might not always be the case. Most insurance companies would not ask for your car’s color. Some may however collect this information and later on among other factors, use it to determine your premium cost. You will therefore need to compare the charges by other insurance companies, as some will not consider this.
5. When you crash someone’s car, your insurance will compensate regardless of the ownership
You may think that your car insurance plan might cover you when you are driving someone else’s car. However according to the policy, it only covers for the driver occupants or any other person party to an accident involving your car. In case you get an accident while driving your friend’s vehicle, you will have to dig deep into your pocket or his car insurance policy will cover for you.
Some may have a cheaper premium with little benefits that will only see the car repaired leaving your medical and other damage cost uncovered. Before exchanging yours with a friend’s car, make sure it has a comprehensive car insurance cover to avoid any unnecessary cost just in case the bad happens.
6. Comprehensive plan is always worth the cost
Comprehensive car insurance is the most common form of insurance in Singapore. Owing to its versatility and wide coverage, it serves most motorists’ choice. Apart from covering your liability to any damage caused to the other party involved, it will cover any other damages caused to your passengers, your vehicle, and any other belonging in your car. This wide coverage diversifies its high premium cost.
On the contrary, this may not be the case always. You will run at a loss your car is too old, and your insurer decides to pay the open market value (OMV) when the repair cost is higher. When your car gets too old that its OMV has depreciated too much, the payout might be so low that it may not be worth the cost of a comprehensive plan. In this case, other minor insurance plans would have better suited you. A fire and theft, third party, third party only or any other plan that demands cheaper premium would be worth it.
7. Changing insurance plan during renewal is an unnecessary hassle
When it comes to buying car insurance, the process demands so much of a hassle and gets exhausting and discouraging. While it may seem as an unnecessary slog, it saves you money as will be able to get a cheaper plan from the wide range of choices. Different car insurance companies sell their plans at different prices.
With the present competition in the business world, you should never expect to have insurance companies offer premiums at equal prices. During every renewal period of your insurance plan, you should be able to create an invoice of many car insurance companies that the same premium at different prices. This will help you save money without sacrificing any important coverage benefit at all.