Tan Kin Lian's Blog: Increase in motor insurance premiums

Saturday, February 20, 2010

Increase in motor insurance premiums

Mr Tan
I've been told by my motor insurer that there was a general increase of motor premiums of about 20% across the industry from last year. This is within your understanding?

REPLY
I believe that this is the situation, but you can call the General Insurance Association of Singapore to find out.

http://www.gia.org.sg/

5 comments:

Anonymous said...: I am wondering if there is any grounds for the Competition Commission to start an investigation into the motor insurance industry. They seem to raise rates in sync with each other.; February 20, 2010 8:59 AM
Anonymous said...: Rex comments as follows,

Mr Tan, may i ask your opinion on this following matter concerning motor insurance:

I heard that, if you have a motor accident and you made a claim (perhaps just a few hundred dollars or thousand, not very huge), then the following year you are bound to suffer an increase in your insurance premiums. You are blackmarked so to speak.

But should not drivers be given some chance? e.g. blackmark if two accidents within 3 years, or maybe based on amount claimed in 3 years average...

Insurance is meant to pool the majority non-accident premiums payments to pay the unfortunate who made a claim. Like sickness, no one wnats to get into accident, but sometimes it happens so why are we immediately penalised in premiums increase the following year?

Everything is supposed to even out and the number of no claims should be more than enough to cover a precalculated number of claims. So is it fair that WHENEVER you have an accident, the next year your premium will ALWAYS increase?

REX; February 24, 2010 6:14 PM
Tan Kin Lian said...: When you renew your motor insurance and there was no claim during the past year, you will enjoy the "no claim bonus" or NCB. The NCB starts at 10% and increases by 10% for each claim-free year until it reaches 50%.

If you make a claim during the past year (or a third party claim against you), you will lose 30% points on the NCB. If you NCB is 50%, it will reduce to 20% on one claim during the following year.

To protect the NCB, you can avoid making any claim, even if you have an accident. You can choose this option for a minor accident.

The lose of 30% in the NCB will result in an increase in premium.

If you have a serious accident that causes a large loss, your insurance company can refuse to renew your insurance on the following year, or impose a loading - on top of the loss of NCB. The loading can be 50%, 100% or even 200% of the premium.

Some insurance companies are quite harsh in imposing this type of loading.; February 24, 2010 10:15 PM
Anonymous said...: Seems like the insurance companies have ways to "offset" the lower premiums due to higher NCB? I was informed by an insurance company that the base premium increases with increase in NCB. The quotes I got from the same insurance company for 3 different levels of NCB for the same car was as follows:
1) 0% NCB - $2,023.45
2) 10% NCB - $1,682.86
3) 20% NCB - $1,594.93

According to them, the above is calculated based on their "special excel spreadsheet".

I guess since motor insurance is compulsory, the insurance companies are calling the shots and we have no way to ascertain or question how they pluck their figures from?; April 20, 2010 7:54 PM
Anonymous said...: My experience is 1st year is $1060+ then 2nd year when renew was quoted $1500+ and only comparing other insurance co. thru 3rd party i got a best offer after 10% NCD is $1126+ (changed insurance co.) Now this year again is time for renewal and again was quoted $1600+ which was already after 20% NCD discounted. Again bargain and compare with other insurance co. and the final result is $1128+ after 20% NCD discounted price.

And I thought after No Claim Discount over the years the premium should be lower and lower by the year but yet this does not happen. I've ask and highlighted to the insurance agents and the reply is the same as last year. "Insurance premium has increased acrossed the board due to increase in the claim experience during the pass one year."

I find it kinda difficult to accept this reason for an increase in insurance premium, others having accidents and making claims but the general public like me who did not make any insurance claim before is being penalized with an increased price. As if I DO NOT have any NCD and still the price increase.; July 12, 2010 11:36 PM