How are Car Insurance Premiums Calculated in Singapore?

Car insurance premiums are fun and easy to calculate, assuming you have a PhD in accounting. Seriously though, there are huge differences in premiums, even between one owner and the next. This is because the premium is varied on a case-to-case basis. In this article, MoneySmart examines how insurance companies decide to bill you.



The Risk Factor Rating System (RFRS)

The Risk Factor Rating System (RFRS) is used to determine your premium. It’s like those “systems” that lottery punters use for 4D, except morbid. It determines how likely you are to get into an accident. It’s based on the following:

  • Make and model of vehicle – Cars that are more attractive, or have more engine capacity, will have higher premiums. In theory, fast cars are more likely to get into accidents. In reality, it’s probably because they know the guy driving the Ferrari would feel like a dork if he tried to bargain.
  • Age of vehicle – This is one reason second hand cars are so attractive: their premiums can be up to 30 percent lower. My car dates back to the Jurassic ages, so I have the lowest premium. And the highest humiliation.
  • Sex of drivers – If the named driver is a man, the premium becomes higher. It’s gender discrimination. I tried to complain to the men’s rights movement, but oh wait, there isn’t one is there? Women are supposedly less reckless.


  • Age of drivers – Premiums are higher for drivers under 30, and over 70. The cheapest premiums come between your 30th and 69th years.
  • Driving experience – You start to get lower premiums after four accident free years on the road. Some insurers won’t take on first year drivers, or car owners that are above 65.
  • Claims history of drivers – If you have no previous claims, you will have lower premiums. If you have previous claims of up to $5000 or more, your premiums will be among the highest. And your application form will reach the head office with glow-in-the-dark radiation stickers.


  • Vehicle usage – The more the vehicle is on the road, the higher the premiums will be. This is mainly to cover commercial vehicles, such as delivery trucks. For private use vehicles, the differences might not be too significant, depending on the insurer.
  • Type of cover – The you can get Third Party Only (TPO) insurance, Third Party (Fire & Theft), and Comprehensive Insurance. TPO has the cheapest premiums, Comprehensive Insurance the highest. 80 percent of cars in Singapore have Comprehensive Insurance: It’s often mandatory if you took a bank loan to buy it.
  • Demerit Points - This is examined separately from the number of claims you have. It’s commonly called the Safe Driver Discount (SDD) or the Certificate of Merit (COM) discount – and it shaves 5% off your premium.
  • OPC Discount – Off-Peak Cars (OPC) may have a discount to their insurance premiums. Ensure that your insurer knows about your vehicle’s OPC status.

Based on this list, the insurer will estimate your odds and give you a price. Since different insurers will come up with different numbers, it’s best to shop around; get five or six quotes before making your choice. Sites like can do this for you automatically, even narrowing down the best and cheapest insurance rates for your car. Simply enter your vehicle details, and the site will determine viable car insurers and the premiums they’ll charge.

Image Credits:
amandahslater, familymwr, Francisco Javier Argel

Any questions on car insurance premiums? Go ahead and ask them below in the comments. 

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