Auto Insurance Myths

Insurance is a must for all cars in Singapore, but many car owners are confused by conflicting information and myths on the topic, particularly about how premiums are calculated and the level of coverage they are enjoying.

Aviva launched its car insurance proposition in April last year, changing the face of car insurance in Singapore by being the first insurer to sell car insurance solely online, direct to the customer. The low-cost online model allows insurers to pass on cost savings to customers, without compromising. Aviva also allows customers to customise their cover so they only pay for what they need, which can translate into additional cost savings of up to 25%. Buying online is simple and straightforward for example, it only takes 60 seconds to get a quote and 5 minutes to complete the transaction on aviva.com.sg.

To help customers better understand how car insurance works, Mr Andrew Tait, Head of General Insurance at Aviva Singapore, sheds some light on the common myths and the realities of car insurance.

Myth: Red cars are charged higher premiums than other coloured vehicles

This myth may have come about because red is associated with danger, and there are many red sports cars on the road. In reality, insurers do not ask for the colour of your car. However, relevant details that influence the premiums of your car insurance policy include the make and model of the vehicle, age of vehicle, use of vehicle, as well as driving experience and claims history of the driver.

Myth: My car insurance policy only covers me in Singapore.

Most car insurance policies actually cover Malaysia and Thailand too. If you frequently drive to neighbouring countries, you will want to pay attention to the different terms of coverage from different insurers to find out which policy works best for you. For example, Aviva’s coverage extends to West Malaysia and 80km into Thailand. Moreover, we provide towing services back to Singapore if your car cannot be driven after an accident, at no added cost.

Myth: All car insurance policies are the same. I only have to choose the cheapest one.

That is definitely not true, and not all car insurance policies are the same. The terms and amount of coverage differ significantly from insurer to insurer. For example, some policies only cover damages to the car, but not medical expenses you might incur in the event of an accident. There could also be differences in the deductible or ‘excess’ of your policy, that is, the amount you bear before your coverage kicks in. (For example, if your deductible is $500, and the bill comes up to $6,000. You will bear $500, and the insurer will pay the remaining $5,500.)

Service level is another aspect that will differentiate insurers from each other. For instance, in the event of an accident, it would be helpful if your insurer is able to arrive on scene to provide advice on next steps, as well as take care of your vehicle if it cannot be driven. Emergency roadside assistance – such as help with a flat tyre – is also a value-added service that some insurers may provide.

Of course, cost is also a factor for consideration for most of us. Shopping around and comparing quotes would be the wise thing to do, but when you’re comparing cost, you should ensure you are comparing costs for the same type and level of coverage.

Myth: If my car is damaged in an accident and cannot be driven, my insurer will provide me with a replacement car while my car is getting repaired.

This is not necessarily the case, as not all insurers include this feature in their policy. Some might provide a transport allowance instead of a replacement car. Additionally, there will also be variants in the maximum number of days that insurers will reimburse you for transport or provide a replacement car, as well as the type of replacement car or amount of reimbursement. You will need to check the terms of coverage of your policy.

Myth: There are now insurers who allow me to buy and manage my car insurance online. But it’s too much hassle.

The online platform actually offers convenience and efficiency. It is available 24/7. You can browse through the available options and get a quote easily, with no pressure to buy. For example, it takes only 60 seconds to generate a quote, and 5 minutes to get covered, on aviva.com. sg. There is also a customer hotline available to assist with any queries you might have, or take care of the claims process for you. Moreover, online providers are able to offer significant cost savings because of the lowoost model they are operating on.  However, buying insurance online certainly isn’t for everybody. For products that are more complex, or if you prefer guidance, you may find that a financial advisor is a better option.

Myth: If I get into an accident that’s not my fault, my NCD can still be affected.

Different insurers differ on this. Aviva, for instance, guarantees that your No-Claims Discount will not be affected if “o claim is made against you. pbu will need to check the terms of coverage in your policy.

Myth: Anyone can drive my car and be covered if I have comprehensive coverage.

You will need to check the terms of coverage of your policy. You may be covered for unnamed drivers, but there may be limitations, such as the age and driving experience of the unnamed driver. For example, some insurers will either not cover, or impose an additional excess, if the unnamed driver is below a certain age or has driving experience below a certain number of years.

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