Car insurance excess in Singapore. Your smart guide

When you buy your car insurance, the insurance company usually sets a basic excess amount or deductible that you have to pay towards your claim.

Here’s how it works 

1. You make an accident claim for $1,000 and your excess amount is set at $600.

   You will foot the bill for the first $600 and your insurer will pay the rest of the claim, which in this case is $400.

2. You have an accident and the quote for repairs comes to $500.

   You will pay the full total for repairs as it’s still under your excess amount of $600. In this case, there’s usually no need to make a car insurance claim and you get to protect your no claim discount. But remember you still need to report any accidents or scrapes to your insurer no matter how small.

   If it is found that the car accident isn’t your fault then some insurers will pay the claim in full and waive your excess.

What is the point of car insurance excess? 

Excess payments aim to reduce the amount of small claims that are made to the insurer - keeping premiums down - and to hand some responsibility back to the motorist.

Can I change the excess I pay?

The good news is that most insurers allow you to adjust your excess amount depending on your budget and your circumstances.

If basic excess is $600, you may opt to reduce this amount in your policy. In the event of an accident you don’t have to pay so much towards the cost of repairs. But, lowering your excess comes at a price. The lower the excess the higher the premium.

When would I pay higher excess?

If you’re young and or inexperienced your excess will most likely be set at a higher rate.

You also need to look at amounts that are added onto your basic excess. These additional excess amounts are related to windscreens, and young and or inexperienced drivers using your car. 

If you have anyone driving your car who is below the age of 25 or has less than two years driving experience, then read your policy to look for the additional excess. 

Voluntary excess

Some insurance companies allow you to opt for voluntary excess - the amount of excess you pay isn’t decided by the insurer, it is set by you.

In the event of an accident you would have to pay both the compulsory excess set by the insurer and the voluntary excess, set by you. This might be an option if you consider yourself to be a very safe driver.  You have to be prepared to take on the risk of a higher payout if you make a claim. 

What is the excess amount at Budget Direct Insurance? 

• At Budget Direct Car Insurance the standard policy excess for cars is $600. You can choose to reduce this excess amount to zero or increase it to up to $3,000.
• For motorcycles the standard policy excess is $500. Again, with Budget Direct Insurance you have the flexibility to reduce this amount to zero or increase your excess to $800.

How should I decide?

When deciding on excess, it’s important to set your limit at a level that you could afford to pay in the event of a claim.

Always check out your insurance policy so you know what your excess payment would be. 

Insurance should be quick and easy to buy, at a price that’s affordable. That’s only fair.

Be sure to check out this claims and excess FAQ if you still have questions.

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