5 Proven Ways to Lower Your Car Insurance Premiums
Owning a car is a luxury many Singaporeans choose to take a pass on. It’s a decision driven by not just the price tag of the car, but because of the host of other maintenance obligations that tie your savings down even after completing the purchase. Aside from zeroing down on a good bank loan, negotiating a sound car insurance policy is the next biggest challenge encountered by Singaporeans.
For the few Singaporeans who do not use a car loan to purchase their car, there are two types of insurance options to choose from – TPO (Third Party Only) and comprehensive. Out of the two, TPO insurance is the kinder alternative for your finances since it exclusively covers the liabilities incurred by the other party involved in an accident.
For others who conventionally opt for a bank loan to finance their car purchase, comprehensive insurance is a mandatory expense. A mandatory expense that often handicaps our finances thanks to a horde of ridiculous premiums constantly assaulting them from all sides.
Fortunately, we’re a part of a system riddled with loopholes. And where there are loopholes, there’s opportunity. Do I sound cryptic? Worry not! We’re talking about legal loopholes that give you the opportunity to optimize your financial expenditure and save thousands of dollars. Here are some invaluable tips to help you significantly cut down on your car insurance spending without compromising on sensible coverage:
1. Explore Your Registered Main Driver Options
This may sound strange or borderline offensive to some, but older people and women are generally believed to be safer drivers by societal norms. Why should you care? Because policy makers running insurance companies do consider social psychology as a vital factor while developing a favourable business model.
Hence, the insurance premiums for drivers who are female, or 40-50 years old, are lower than the standard market rate. By registering your parent or female partner as the main driver, you can take advantage of this benefit. This strategy can also work wonders for Singaporeans who have a history of previous accidents.
Although car insurance negotiation is still a case-by-case game, even a minor difference can lead to savings worth a couple hundred dollars.
2. Due Diligence Is Essential
The qualifications and assessment criteria of insurance companies across Singapore are highly variable. Some of them may dismiss an old accident as trivial; whereas, some may look at it as an omen for a reckless speed demon. Each of them will issue your premiums based on their company criteria. This is why it’s imperative to take the initiative to research, compare and analyse the policies to estimate the premiums you may have to shell out based on the history of people with similar cases as yours.
Timing is of the essence too when it comes to purchasing car insurance since insurers have sales quotas to full fill and will surely lower their premium rates when they are trying to entice more customers to sign up with them.
3. Supplement Your Coverage Sensibly
In the car insurance market, there is no singular product that can be called the ultimate financial savior for all your car-related problems in the future. There is tremendous fragmentation and a dearth of rag-tag tag-along options marketed by insurers to supplement your primary product.
Although options like personal accident coverage may be valuable add-ons, it is frivolous to fall for products related to coverage for windscreen damage and riot-related vandalism. Such paranoia may be justified if you were living in Somalia, but last time we checked, it is Singapore we’re talking about.
4. Do Not Modify Your Car Without Consultation
Vin Diesel’s character in Fast and Furious likes to live his life a quarter-mile at a time. In the real world, we call that wishful thinking. So before you get caught up in the adrenaline-chasing spell of Hollywood and end up modifying your car to turn it into a supercar, take some time out to consult your insurer first.
Singaporean insurers are notoriously stringent when it comes to third party modifications like body kits, sports rims, and wings. Don’t even think about installing a Nitrous system! Anything that is outside the manufacturer’s default specifications can be termed as a mod and used as an excuse to kill your policy.
It doesn’t matter even if the car modifications are compliant with Land Transport Authority regulations. If they violate your insurance contract, you can kiss your coverage goodbye.
5. Don’t Stray From The Default Insurer List Of Workshops
Every insurance company provides a list of authorized and trusted agent workshops they deal with. However, some people prefer to stick to their own favourite repair workshops and choose the ‘preferred workshops’ option while registering their policy.
Although you will have no problems in filing your claim and getting your payout, you will end up paying higher premiums and higher accidental coverage charges than you would if you were dealing with the mechanics on the insurer’s lists.