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How is Your Car Insurance Premium in Singapore Calculated?

Car insurance is compulsory in Singapore, as is the case in most parts of the world. A car insurance policy provides an idea of what an insurer is likely to pay in case of an incident. Such policies do cover injuries inflicted on the driver as well as third parties and any damages caused.

Car insurance is not cheap in the island nation. The cheapest policy starts at $850 and could range up to thousands of dollars. Insurance companies do consider a number of factors when it comes to determining the amount of money one has to pay for a car insurance policy.

The amount payable on premiums varies from one person to another given the variation of risk profile. It thus helps to know the factors that affect car insurance premiums and how to work on some of them to reduce the amount payable.

Driving Experience

Driving Experience is one of the biggest factors that goes into the calculation of car insurance premiums. A rule of thumb is that more years of driving experience generally mean lower premiums.

Insurance companies deem drivers with more years of experience and less incidences, less likely to get into a car accident. In Singapore, drivers with more than 10 years of experience and a safe driving record pay hundreds or even thousands of dollars less on car insurance premiums.

Numbers of Claims Filed

It is common for insurance companies to ask in the application form the number of car insurance claims one has filed so far. The number of claims one has filed goes a long way in affecting the calculation of car insurance premiums.

Insurance companies use such information to determine how safe one’s driving behaviour is. For that reason, people who have filed a claim in the recent past will most of the time end up with a higher car insurance premium.

Drivers with high ‘no claims discount’ also end up with lower car insurance premiums most of the time. This is in part because; you can only build the same, on maintaining a record of safe driving without accidents.

Type of Car

Multiple aspects of a car, up for insurance, affect the calculation of premiums in car insurance. Expensive cars will most of the time come with expensive parts that cost more to insure. Vehicles with higher engine capacity also tend to command high premiums in Singapore.

The age of the car also affects the calculation of car insurance premiums. It is common for new cars to command higher premiums. In addition, premiums tend to increase on a vehicle passing a certain threshold of age.

However, calculation of premium on this factor varies from one insurer to another.

Drivers Age

Insurance companies pay great attention to driver’s age when it comes to calculating car insurance premiums. Premiums tend to be typically higher for drivers below the age of 30.

Younger drivers, according to insurance companies, pose significant risk given that they are less experienced at the wheel than older drivers are.

Older drivers typically above 70 years old also contend with higher premiums as insurance companies perceive them to be of a greater risk.

Occupation

Occupation affects calculation of car insurance premiums. People who spend more time on the road or carry important equipment do elicit strong scrutiny leading to higher premiums.

People who do most of their jobs indoors, on the other hand, tend to command cheaper premiums. However, the same is not the case for people with outdoor professions that involve moving from one place to another most of the time.

Gender

While it is impossible to change one’s gender to enjoy cheaper premiums, it is important to note that it does affect car insurance premium calculation. Insurance companies deem women as more careful drivers. For that reason, they would most of the time end up with cheaper premiums.

In Singapore, women with clean driving record end up with lower car insurance premiums across all ages, compared to their male counterparts.

Dennis Lee

Dennis Lee

Financial Services Manager

Dennis Lee’s experience spans over 27 years in the Life Insurance Industry. He began his journey in Pana Harrison back in 2000 and is a competent Financial Services Manager.

Specializing in both Commercial & Individual insurance needs, his clients has been with him for the past 20 years and counting.