Find the right motor insurance

Dear Mr Tan

I own a car and is compulsory to buy motor insurance. Who should I buy the insurance from? Who offers the best rates?

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REPLY:

You have the following options:

1. get your insurance agent to find out who offers the best rate on each year's renewal
2. search for the best rate by yourself
3. find a low cost insurer, and stay with them for many years

Many people adopt method 1. The disadvantage is that the agent may find you an insurer that pays them the highest commission. However, if you have a trustworthy agent who can look after your interest, this method is suitable for you.

It is quite troublesome for you to adopt method 2. Apart from finding the lowest rate, you have the trouble of submitting a new application to switch the insurance company. You are also not familiar with their claim practice and service quality.

It is best to adopt method 3. A low cost insurer has the following characteristics:

* sell insurance to you directly (and save on the 15% commission payable to the agent)
* have an effective system to manage the claims (and avoid paying high repair charges)

Usually, the low cost insurer will ask you to allow them to handle the repair of the vehicle. This gives them the ability to avoid paying for inflated charges. By managing the claims well, their can continue to offer competitive rates and benefit all their customers.

A well managed insurer will have have transparent practice on their handling of the claims (to ensure a high quality of repair and customer service). You can read their practice FAQ.

NTUC Income fits into this description. You can contact their business center or see an insurance agent.