Importance of Car Insurance

continental insurance companyPeople don’t realize the importance of car insurance until they have to deal with damages and accidents for themselves. Some people are very hesitant to get car insurance because it is an added bill to pay. Realistically speaking car insurance premiums can be a burden to some. This is also the main reason why there are delinquent payers of car insurance.

But people shouldn’t be hesitant about car insurance because the advantage of having it trumps the burden of paying extra for it. They need to realize that having it designed to protect them more than a waste of money. We know that being safe all the time isn’t enough because accidents do happen.

Car insurance (or insurance in general) is important because it covers your expenses in the event of vehicle damage or injuries to other drivers, passengers or pedestrians. It can also provide protection from liability, damages, and financial loss, but in the end, its main purpose is it usually comes down to money. It protects you from having to pay damages in the event that you are found at fault for the accident. It is more practical to pay for a certain amount of money every month than to pay for an expensive damages or accidents. They say that car insurance is one of the necessary evils of modern life. It is.

So how does it work? You will pay a substantial amount of money each month to a car insurance company, and if you are like most people, have not had an accident or made a claim in years. Yet when you do suddenly find yourself involved in a collision, the insurance premiums you’ve been forking over all these years will finally pay off. Doesn’t sound so bad?

It is mandatory to drive a motor vehicle on the road without a valid car insurance policy in Singapore. Their minimum requirement for their resident who plan to acquire a vehicle is that at the very least the policy provides cover for personal injury to other parties.

Now that we’ve established the importance of car insurance let us now discuss on how having a car insurance without shedding lots of money. Let’s face it, having a car doesn’t just stop by driving it. You need to allot time and money on gas and maintenance and having car insurance may be a bit of a burden to some more than the others.

Let’s us use SG (Singapore) again for instance. Most insurer on SG that will get a car insurance adopt a “risk factor rating system” when setting your premium. This means that the premium is based on factors other than the vehicle’s value or the price you paid for it.

The following are the risk factors that are considered when setting your premium:

  • Make and model of vehicle
  • Engine capacity
  • Age of vehicle
  • Age, sex and occupation of drivers
  • Driving experience of drivers
  • Claims history of drivers
  • What vehicle will be used for (private use/corporate use/commercial use/hire etc)
  • Type of cover

These risk factors will not essentially have an equal impact on the size of your premium but it is a start list to consider on what to car insurance you would get (others get Continental insurance, but that’s for another article).

There are ways on how to have car insurance today without giving you a financial headache. Also, you have to gather information or do a research first if budget is your main concern. You may inquire to various leading insurance companies out there if you need further details that will help you get the car insurance that you need and the car insurance that you want.