Finding the right car insurance policy is as essential as finding the right car, and these decisions go together. Whichever car you buy can have an effect on your insurance plans.
Despite car insurance being a mandate in Singapore, it does not mean that it will be costly. However, if you feel like you are being charging massive premiums on your car insurance policy, it’s time to reassess your car insurance needs.
There are cases in which the cost of car insurance can be reduced.
In this article, I am going to explain the Top 9 Car Insurance Mistakes committed by insurance buyers.
Selecting the wrong type of policy
Contents
There are three variants of car insurance in Singapore i.e.:
Third Party Only
- Third Party, Fire and Theft
- Comprehensive Coverage
Although comprehensive policies are better for more inclusionary coverage, they are more expensive. You can choose the policy which you think is most suitable for you according to your budget and usage of the car. You can also get quotes from insurance companies before deciding on the best plan for your car.
Not Understanding Your Needs
Every country has different statutory limitations about what insurance you need and how much coverage is needed. However, those restrictions are just the minimum of what you can have. Different insurance carriers require different quantities of insurance and finding the correct balance of premiums and insurance is key to saving money.
If you’re not sure what policy youmay need, it’s probably best to contact an insurance agent when you’re first shopping for a policy. If you want to consider other providers at the time of renewal, you’ll have a clear idea of the types and levels of insurance you require.
Not Comparing Policies before buying
Car insurance plans from difference insurers vary in terms of service benefits and premium rates. To assure that you get the right premium rate, you can compare it first and buy it after that. Comparing not only helps you to reduce your insurance cost, but it also allows you to select the right benefits/options of coverage you want. So, if you’re buying a policy without comparing it, you’re probably making a mistake that might make your car insurance expensive.
Not Updating After a Major Life Event
It is important that you update your car insurance policy after a major life event, such as marriage, divorce, moving to a new home, or adding a newly licensed youngdriver to your family. For example, if you get married, your rates are likely to decrease. If you already own other type of insurance from the same insurance provider, you might be qualified or discounts through bundling your policies with one company.
Car insurance is one of the few areas of life where sexism is legal in certain cases.Insurance providers may charge different rates to men and women and change rates as you age. This legal method of discrimination is based on statistical averages for statements of these demographic categories.
Staying forever with the insurance company
Most people only pay their car insurance payment when it’s due, not giving it a second thought. However, if you want to save money, the renewal time is a perfect time to search for a better offer. You might discover that you’re getting a lot more value for your buck orrealise that you’re paying more than you should.
As you already have a policy in hand, you actually have a pretty good idea of what coverage you require. You can go online and submit quotes for the same coverage from a number of agents and firms, without wasting too much time. If you’re satisfied with the existing company but get a lower offer somewhere you can take the quote back to your agent to see if they’re able to equal or exceed the price
Not choosing All the Available Discounts
When looking for a car insurance policy, make sure to take advantage of any discount that is open to you. This includes items like multi-car and bundling discounts, as well as things like price reductions on low mileage cars. Staying with the same company forever isn’t always the best option, even though loyalty can bring discounts. Remember to do research on the available discount before deciding on your purchase.
Not using the accumulatedNo Claim Discount (NCD)
Your auto insurance policy enables you to earn a No Claims Discount if you do not make a claim in any policy year. This discount will also increase per claim-free year. So, when renewing, you can check whether the related NCD discount that applies to your renewal premium. If you switch insurance companies, do make sure that the NCD is transferable to the new insurance policy that you are buying.
Opting for unnecessary add-ons
Add-ons are essential coverage functions that improve the range of coverage. They do, however, come at an additional premium. While you’re supposed to opt for add-ons, you’re supposed to cut down on unnecessary ones, so review your usage and choose the add-ons wisely to the frills off your auto insurance. Some insurers also offer a discount of your insurance premium if you opt for a digital copy of your policy instead of receiving a hard copy version.
Making small trivial claims
Your car insurance policy gives you a discount benefit on your premium for not making a claim. You may lose your NCD if you make a trivial claim, as such, it is always advised to check if the claims will affect your NCD and pay for smaller claims from your pocketsto protect your NCD. Always evaluate the impact before making a claim.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.
