As we know, Singapore is a costly country – especially when it comes to owning a car. The price of owning a car is high. It is almost six times of that in the United States; and the same is the case with the vehicle insurance.
Knowing the tricks of the trade can help you reduce vehicle insurance renewal. Here are the 5 most effective ways to reduce vehicle insurance renewal costs:
#1 No Claims Discount (NCD)
Typically, the No Claims Discount (NCD) is applicable to drivers who have remained accident-free. It is given by insurers to policyholders in the event that they do not make any claims during that policy year. In other words, it pays to drive safe in Singapore; not just in terms of safeguarding your life but also concerning money.
In general, for every year that a person has driven the vehicle and not made a claim, there is an additional 10% discount. The NCD goes up to a maximum of 50% for private cars and 20% for commercial cars and motorcycles. However, you should always check with your individual insurer as to what their policy regarding the NCD is.
However, the NCD is also affected if you fail to report an accident within 24 hours on the incident. Meaning that you should not delay making a report if you want to keep your NCD intact. While you will be making a claim, your insurer will determine which party was at fault. For most insurers, if your liability is below a certain percentage, your NCD will not be affected.
Another useful thing to note is that the NCD is non-transferrable between drivers – with some exceptions. It is only logical that the NCD is accredited to the safe driver and not the vehicle. However, as mentioned, there are cases where the NCD may be transferred between spouses.
For more information, always check with your insurer as to their individual terms and conditions as they may from one insurer to the next.
#2 Keep the traffic violations & demerit points to a minimum
The Singapore Traffic Police awards a Certificate of Merit if you do not violate any traffic rules for three consecutive years. This certificate provides a further 5% discount on top of the NCD. This is called the offence-free cut.
On the other hand, this discount can be ruined by traffic violations. Traffic violations acquire demerit points for each violation. For instance, driving recklessly carries 24 demerit points and using your mobile phone while driving brings in 12 demerit points.
Keeping your demerit points low helps in reducing vehicle insurance renewal costs. In other words, being a responsible driver will help you cut costs.
#3 Keep the excess amount high
Policies that have a higher excess amount have a lower premium. The excess amount is the amount that the vehicle owner needs to pay out of pocket in case of an accident claim.
It is necessary to adjust the excess amount prudently so that the premium is reduced as well. This means you don’t need to pay a high amount in case of an accident.
#4 Add a second driver to the policy
Many insurers provide lower premiums for drivers more than 40 years of age. Additionally, premiums are more economical for female drivers and for the ones with a lower risk profile.
Therefore, it is beneficial to add a second driver to the policy. Especially one who has a low-risk profile and better record. Be mindful that an individual in the high-risk category can increase the premium. Be cautious of whom you choose to add.
At the same, bear in mind that adding someone’s name as the primary driver on someone else’s car, known as fronting, is a fraud and should be avoided. This can lead to the entire claim being invalid and even a prosecution.
#5 Aim for a dual year policy
Another effective way is to take a dual year policy for vehicle insurance. Many insurers offer a vehicle insurance policy for two years. Upon analysis, the dual year policy can save about SGD 50 in premiums. The dual year policy makes sure that the premium is locked for two years. Meaning it is not subject to a hike in the second year.
Along with the ways mentioned to reduce vehicle insurance renewal costs, it is always advisable to do your research while selecting and renewing your policy.
Go for the best available rates and options after studying and comparing all the market options. The comparison can be made online or in person, and help you choose the best vehicle insurance renewal.
*The advice offered in this column is intended for informational purposes only and not intended to replace or substitute for any professional, financial, legal, or other professional advice. If you have specific concerns or a situation in which you require professional help, you should consult with an appropriately trained and qualified adviser.