Car Insurance Terms & Details | Buy Car Insurance in Singapore

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Car Insurance Terminology

While buying car insurance, you will come across certain important terms used by your car insurer. It is very important to know and understand the terminology.

Listed below are common terms:

Premiums: First & foremost, the term you will encounter is Premiums. You should thoroughly understand that how much premium you would pay and for what? Premiums depend on your car’s make, power and features you want to get covered. Insurance companies give you choice of paying annual premiums or as monthly pay out. You can choose as per your ease.

Excess: An excess payment is the amount of money that you’ll have to pay out of pocket for damaging your car or another person’s car before the insurance company will cover the rest. Let’s say your excess payment is $100 and you hit your car, incurring repair costs of $1,000. You have to pay the first $100 for repairs, and your insurance company will shell out the remaining $900. The higher the excess on your policy, the lower the premium. Conversely, the higher the excess, the lower your premium. It may seem like a good idea to go for an insurance policy with a high excess to lower your premium, but if you get into an accident, you will have to pay the high excess out of pocket, which could be painful.

No Claims Discount (NCD): Or No claims bonus, whichever way you want to address it as. This is your insurance company’s way of recognizing and rewarding you for careful driving. It is a count of the number of years in which you haven’t made a claim on your car insurance policy and reduces the premium you have to pay the following year. Insurers will usually give a 10% discount for every year that you don’t make any claims, up to a limit of 50% for five years or longer. Some insurance companies offer an NCD protector on their policies, which means you can pay an extra fee to have your discount kept intact even if you make a claim. However, this is usually only good for just one claim, so you still need to be careful on the road.

Your NCD is usually tagged to your name and not to your car, so even if you change a car, you can retain your NCD.

Driver

These terms can be used loosely by different insurance companies, but generally, the main driver is the policyholder and also the person who drives the car most frequently. Named drivers are other drivers whom the policy owner declares are allowed to drive the car, such as other family members. It is important to add other people who will be driving your car to your policy so they will also be covered.

Exclusions: These are the features which are not included in the policy. Amidst other exclusions, one of the general exclusions in the policy is: “Any loss or damage due to the failure or negligence to take reasonable and necessary precautions to protect property and minimize claims under this Policy…”

Hence, you need to drive carefully in Singapore!


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