With COE prices looking to drop further in 2016, the idea of you driving in the upcoming Year of the Monkey isn’t going to be limited to playing as Donkey Kong in Mario Kart 8. But before you start dreaming of anti-gravity racing, you might want to find out how much your car insurance is costing you. In today’s highly competitive insurance market, why are you still paying such high premiums? Probably because you didn’t know they could be lowered.
Here are 3 surprisingly easy ways to reduce your car insurance premiums.
1. Offer to pay higher excess
When it comes to insurance policies, the basic understanding is – the more coverage you get, the higher your premiums. So if you expect your insurance policy to cover the cost of all the damages should you get in a car accident, be prepared to pay ridiculous car insurance premiums each month. On the other hand, if you’re a relatively safe driver, consider negotiating with your insurer on your excess.
Excess, also called a deductible, is the maximum amount you as the insured need to pay. For example, say you have an excess of $500. If you get into an accident and the damages you need to pay is $2,000, you will only need to pay $500 and the insurance company will pay $1,500.
However, if you’re not the kind to cause accidents, it might actually be cheaper in the long run if you raised the excess of your policy. This is because policies with higher excess will have lower premiums. Of course, since this benefits you, be sure to ask your insurance company for this option.
2. Shop around for the best premiums and coverage
If your policy is under a company that is relatively inflexible – like if they aren’t willing to increase your excess in order to give you lower premiums, don’t feel like you’re out of options. There is no reason why you should stick to an insurance company that isn’t going to benefit you.
First, you have to decide what kind of coverage you’re looking for – if you’re driving a bang for buck workhorse of a car, you’ll probably not feel like you need to get comprehensive coverage. After all, you probably don’t need coverage for damages or loss as the result of theft, vandalism or weather-related damage. Since your car isn’t a luxury model, it’s highly unlikely that you’ll be the victim of theft or vandalism. You could stand to save a significant amount each year by choosing a lower coverage level.
Also, how much your premiums will cost you differs from insurance company to insurance company, and is dependent on several factors, including the model of the car, the age of the named drivers, and even the gender. In this day and age, it’s easy to get premium quotes from the various insurers in Singapore. Or you could simply get a list of quotes from a car insurance comparison site. So take the time (it’s a lot less complicated than you may think!) to source for quotes and find out which company is willing to offer you coverage for the lowest premium.
3. Maintaining your No-Claims Discount and Safe Driving record
It sounds silly to say this, but insurers love drivers who don’t get into accidents and file claims. Like, duh. That’s like saying con artists love meeting naïve people. It’s easy money.
The good news is, if you don’t file a claim for a year, you get a 10% discount on your premium for the following year. Keep up your accident-free record for 5 years or more, and you could be enjoying up to 50% off your car insurance premium. However, if you make a claim after 5 years, your No-Claims Discount could drop to 20%. There is something called the No-Claims Discount Protector but taking it up may restrict your ability to leave your current insurer. Always check the terms and conditions before applying for the No-Claims Discount Protector.
Even if you don’t get into accidents, just having the habit of driving safely will keep your premiums low. That’s because insurers also look at the number of demerit points a driver accumulates over a period of 4 to 5 years. So if you’ve been racking up demerit points like the way you’re racking up calories, consider listing someone with zero demerit points as the named driver in order to reduce your premium.
That being said, do remember that with some policies, the coverage doesn’t extend to you if you are not a named driver.
Ultimately, driving safely isn’t just good for your health, it’s good for your wallet too.
Do you have any other tricks to lower your car insurance premiums? Share them with us.
Photo credit: Matteo Paclotti, BMiz, Fabiene LE JEUNE