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Car insurance in Singapore: All you need to know to get the cheapest rate (2022), Money News

  • August 17, 2022

3. What is excess? And how much should it be?

“Excess” refers to the amount you have to pay out of your pocket before the insurance company pays for the rest.

For example, Ryan is coasting down the freeway, headbanging to a Linkin Park album when a tree jumps in his path. He slams into it, and the cost to fix his car is $2,000. His excess is $600 (for a pretty comprehensive plan). So he just pays $600, and the insurer forks out the remaining $1,400.

Excess is inversely related to the cost of the car insurance plan. In plain English, this means…

Low excess = expensive insurance premium. If an accident happens, you’ll be very glad you need to fork out only $600, especially since you might already be stressing out over medical bills and having a rough time in general. But you will feel very broke when you pay for your annual car insurance premium. If you’re looking for a low excess of $300 to $400 or so, you can expect to pay $3,000 upwards for your annual premiums.

High excess = cheaper insurance premium. The good news is, you’ll get a bargain on your car insurance. The bad news is, you’ll be afraid to drive your car. This is a risk you might not want to bear unless you’re the safest driver on earth and enjoy the protection of a prominent deity.

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Note that if you add on a perceived “risky” driver – eg your kid (under 23 years old with less than two years of driving experience) who’s just gotten her driver’s license – your insurer might force you to accept an additional young and inexperienced driver excess without any discount on your premium.

4. Should I get comprehensive or TPO (third party

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