Singaporeans are spoilt for choice when it comes to the type of coverage that they can look for when purchasing their car insurance. Not only are they able to compare across companies, car owners now are also able to customise the type of coverage they want on top of the Compulsory Third Party (CTP) coverage that they have to get. However, the basis for comparison is still the price and Singaporeans tend to go for the cheapest.

While it is logical to be shopping around for the best deals for your car insurance, it is best that you consider the savings from a long-term perspective, rather than just looking at the cost of your annual premiums. Here are three reasons why the cheapest car insurance isn’t always the best.

1. Ease Of Claims And Convenience

The last thing you want to worry about in the event of an accident is how long your insurer will take to get back to you. Most insurers now provide accident assistance but the quality of the service varies.

For example, NTUC Motor insurance has a value added service called Orange Force, a 24-hour accident assistance for policyholders in the event of an accident. Not only do they assist in the removal of vehicles, but they also assist in arranging for alternative transportation.

Different insurers will have different procedures and escalation times. This time frame can get even longer, depending on the complexity of the accident and the number of people or vehicles involved. Some insurers, such as DirectAsia.com, assign a single claims executive to assist you throughout the claims process. This could make the process a lot smoother and less painful.

The type of policy could also determine the variety of options that you have in choosing where to send your car for repair.

While some are willing to send their car to any authorised workshop by the insurer, most would want to send their car to a workshop of their choice. The benefits here would include not only a trusted workshop to work on your car, but also potential cost savings from being a regular at the workshop.

2. Limited Coverage Means Potentially Having To Pay More

If you were to just purchase the Compulsory Third Party (CTP) insurance, there might be a lot more to pay for in the event of an accident. While it’s often cheap, there is a long list of things that you will not be covered for, such as damage to your vehicle or fire and theft.

Some drivers also like to get cheaper premiums by agreeing to a higher excess amount. The excess is the amount that you, the driver, have to pay first in the event of an accident. The insurer will only be liable to cover amount beyond that

A high excess may mean paying for all the repairs yourself. For example, if you have a high excess of S$3,000, but break your windshield with the repair costing S$1,200, you would need to bear the entire cost yourself, as the insurer is only liable for costs above the first S$3,000.

3. Additional Benefits

Just like any insurance policy, it is important that you purchase on a needs-based criteria.

Drivers who frequently drive up to Malaysia or Thailand should pick insurance policies that cover workshops in these locations.

The policy should also include cover the cost of towing your car back to Singapore, as it may not be drivable following an accident. The cost of towing the car back could cost you around S$200.

As with all insurance policies, simply going for the cheapest deal is not always the best. Remember to consider your needs and get a product that fits within your budget.

This article was contributed by SingSaver.com.sg.