5 common car insurance mistakes in Singapore
When it comes to buying car insurance, certain kinds of mistakes can cost us dearly. Our premium costs may go up, or worse – the policy could be rendered void and useless when we need it most.
Don’t pay the price for ignorance! Here are the top five mistakes to avoid when insuring your car in Singapore:
1. Not updating your insurance company on major changes in your life
Congratulations! You just got married, got a promotion, and your firstborn is on the way! When a major life event takes place, consider updating your motor insurance company. It is not the most obvious thing to do, but you could actually save yourself some money by doing so. Further down the road, it might even save you some headaches.
For instance, being married or being subjected to better work conditions might make you a lower-risk customer, which entitles you to bigger discounts on your premium.
And when your spouse or child gets a driving licence, you should update your car insurance provider too. Your risk exposure may fly up and take your premium along with it, so what is the incentive to report such information, you ask? Basically, you need to update your policy to cover any new driver of your car. Otherwise, should the unregistered driver get involved in an accident behind the wheel of your car, your insurer may outright refuse to cover the damages. So remember to always keep your information up to date.
2. Sugar-coating your driving history
No one likes to bring up the time when they got a speeding ticket or caused a minor accident. Why? Apart from the obvious loss of face, full disclosure might make your insurance application look less glossy and drive up your insurance quotes too.
On the flipside, withholding the truth could give you unrealistic results – bear in mind that the quotes you get online or through an agent are simply preliminary estimates and not the actual premiums.
When they receive an application, car insurance providers in Singapore will always check with the Traffic Police of Singapore through the EDDIES system on the applicant’s background. Any traffic accident or insurance claim made previously will be quickly picked up and factored into the calculation of the actual premium.
Also, insurance companies have their own methods of finding out if a customer was less than honest on an application. For example, they may not have declared the actual number of drivers for the car, or used a personal car for commercial purposes. If the truth surfaces, auto insurance providers could raise the premiums or even render a policy void.
3. Not getting NCD protection
Some insurers offer their customers a safeguard for their No Claims Discount (NCD) at a price. The benefits far outweigh the extra costs, so don’t automatically write off this form of protection.
The NCD might save you a lot of money, sometimes up to 50% of your premium, and it is true that this benefit is lost after either one or two accidents. But with NCD protection, you are shielded against a single accident, which gives you an extra chance to get the most out of your discount.
4. Always aiming for the cheapest rates
We all want to save cost, but not if it could cost us dearly in the end. Some people make the mistake of buying the cheapest third-party coverage when their situation demands for full comprehensive coverage.
If you drive a luxury vehicle or constantly ferry around a full car of passengers, for example, getting into a car accident could mean paying thousands upon thousands on repair and medical bills if you lack first-party coverage.
Also, if your third-party coverage is too limited, the insurance company’s liability may run thin, and you’ll have to cover the expenses that exceed the payout limit.
Getting the least expensive insurance usually means getting below-par protection. When picking your car insurance coverage, always take into account the amount of risk that you and your family can bear.
5. Not actively looking for other options
Some policyholders make the mistake of sticking with a single car insurance company in the hope of getting loyalty discounts. It may work in your favour but not always – there could be better deals out there that more than make up for your loyalty benefits.
It is important to note that all insurance companies are different and continuously evolving, so the options, services and customer conveniences may vary highly between companies and may even change from one policy term to the next. Keep up-to-date on the latest policies around. Knowing what each has to offer could easily change your mind, especially if you happen to be paying the same amount as a higher-tier service and coverage.