Ways to save on your car or motorcycle insurance premium

Having a car or motorcycle insurance is a smart and prudent necessity. However it adds to the extra cost of driving., especially in Singapore where the costs of driving are so high. We at Moneysigma.com have compiled a list of ways one could save on car or motorcycle insurance premium in Singapore.

NCD or No claim discount:

No claim discount or NCD is the discount offered by your insurer on your renewal if you do not claim on your policies and is an upfront way to save on your car or motorcycle insurance premium. NCD increases every year of non consecutive no claims up to max of 50% on private cars and 20% on commercial vehicles or motorcycles. Being a good driver is rewarding. Your NCD will not be deducted every time you claim in cases you are ruled not at fault. Find our guide to what is NCD and how do you check yours here. Make sure you declare the right NCD in your applications to get the best discounts. Your insurer has access to NCD database and can lookup the latest status for you.

If you do have good NCD on your driving profile, opting to protect the NCD may help you save on renewal premium, if you plan to stay with the same insurer. Check what is NCDP or NCD Protector in Singapore.

Certificate of Merit

Certificate of Merit or Offence free discount is a certificate issued by Traffic Police in Singapore. You are eligible if you maintain a continuous demerit point free driving record for the past three years. Certificate of Merit gives you extra discount over No claim discount and can help you reduce your premium. Check your certificate of merit discount here.

Change your excess or deductible

Excess or deductible is an extra amount you will pay to the insurer in case you end up claiming. This amount is usually deducted by the insurers when they have to pay you for your claims. The higher the excess you opt to pay later, lower is the insurance premium charged now. Play around with excesses to check if you are comfortable to reduce your insurance premium now.

Read more in depth about what exactly is excess and should you opt for higher or lower excess.

Pay less for Low mileage or off peak car usage

If you own an off peak car your usage is bound to be less. Insurers have lower premiums if your car usage is Low. If you own an off peak license plate then declare it to reduce your premium. Some insurers also reduce their premium based on mileage. The more accurate mileage you can declare the lesser the premium. Directasia for e.g., has a Low mileage policy which is offered when you declare you drive less than 8,000 Kms an year. However please note exceeding the usage may come with an hefty fine or decline of claims.

Opt for the right insurance coverage

The three basic types of coverages namely, Third party only, Third party fire and theft and Comprehensive covers your car or motorcycle to various levels.

If you own an older car or if the cost to replace any parts is cheaper than paying for the fully covered expensive insurance, it would be a good idea to choose a cheaper insurance policy. You might have to shell out money for repairs, but that might cost lesser than the price you are paying for an expensive policy. It is a good idea to compare the pros and cons of this approach and choose the right coverage.

Opt for only necessary Optional benefits

Some insurers pack their policies with lots of extra benefits. You may want to carefully read through and opt only for benefits you really need. Opting out from some options will help you save on your car or insurance premium. On the other hand opting in for some options may help you save on your premium.

E.g., if you opt for paperless policy and do not want the physical documents mailed to you( A digital copy can be downloaded) then insurers offer you a discount.

Opting to install a car camera and providing footage during claims will also help you save on your premiums. Directasia provides you extra 4% discount for this optional benefit.

Avoid modifications to your car or motorcycle

Modifications that are LTA-approved are usually allowed by insurers when declared on the policy. Any modifications not approved by LTA is bound to void your insurance policy.

Although some of these modifications are allowed, they increase the cost of replacements. For example, if you had modified the exhaust system or rims, the insurer might have to pay more in order to replace it on a claim.

As such, any modifications (even if they are LTA-approved) will increase the cost of the car or motorcycle insurance premium.

By avoiding modifications and sticking to the originals from the manufacturer, you can make sure you get a cheaper car or motorcycle insurance in Singapore.

Stay with the same insurer if they have loyalty discounts or you have other policies with them

If you stay with the same insurer for long, they might have some loyalty discounts or some promotions for renewal customers. Look around for these to get a better offered final price. Also if you have other policies like travel, health or life with a certain insurer- they might have extra discounts to cross cover you for car or motorcycle policies. Selling multiple products to the same customer helps insurers save on operation costs as well as they can underwrite your premium in a more fairer way with the extra details they know about you.

Look around and compare

Various insurers underwrite your premium based on variety of factors and will have difference in pricing. Moneysigma recommends to at least quote from 2 to 3 insurers and compare them for the optimal match of price and your required coverage.

Find Other discounts or promotions

Some insurers offer you interest free monthly payment and this is good way to spread your costs over the year. Opt for monthly premium for proper budgeted planning. Look for various promotions with all insurers.