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Price the Claim Month, Not Only the Premium
A high excess moves part of the risk from the insurer back to you, often in return for a lower premium. That can be efficient when you have the cash and understand the contract. It can also make a policy difficult to use precisely when a claim arrives.
Compare both states: a quiet year and a claim year. The right excess is one you can pay without borrowing, delaying an essential repair, or draining money reserved for another obligation.
Two numbers to calculate
- Annual saving: low-excess premium minus high-excess premium.
- Extra retained loss per applicable claim: high excess minus low excess, including additional excesses.
Worked three-year comparison
Assume two hypothetical quotes have equivalent cover, drivers, workshops, and benefits. Quote L charges S$1,500 a year with a S$600 excess. Quote H charges S$1,250 a year with a S$1,500 excess.
| Three-year outcome | Low excess: S$1,500 premium + S$600 per claim | High excess: S$1,250 premium + S$1,500 per claim | Lower total |
|---|---|---|---|
| No applicable claim | S$4,500 | S$3,750 | High excess by S$750 |
| One applicable claim | S$5,100 | S$5,250 | Low excess by S$150 |
| Two applicable claims | S$5,700 | S$6,750 | Low excess by S$1,050 |
The high-excess quote saves S$250 a year. Each applicable claim adds S$900 of retained loss compared with the low-excess quote. The three-year premium saving is therefore smaller than one additional S$900 excess event.
This arithmetic does not predict claims or include No-Claim Discount changes, repair costs below the excess, non-renewal, premium changes, or different claim treatment. Use it to expose the trade-off, then insert the actual quote terms.
Find the total applicable excess
The bold number on a quotation may be only the basic excess. A separate excess can apply because of the driver’s age or experience, whether the driver was declared, the workshop chosen, or the type of loss.
- List every person who may drive the car.
- For each person, ask the insurer for the basic excess and every additional excess.
- Ask whether those amounts are cumulative.
- Record the total against that driver before accepting the quote.
As a dated product example, Income’s current Drivo information states a S$600 basic excess unless another amount is shown. It also states an additional S$2,500 for an unnamed driver under 27 or with less than one year of driving experience, and S$500 for an unnamed driver aged 27 or older with at least one year of experience. These are one insurer’s current terms, not market-wide rules, and they can change.
Run the same-day cash test
Set aside the premium saving mentally. Could you pay the full applicable excess today and still cover the next month’s housing, loan, and household bills?
| Result | What it suggests |
|---|---|
| You can pay it from accessible savings without touching essential reserves | A higher excess may be a deliberate risk-retention choice. |
| You would use credit, postpone the repair, or empty the emergency fund | The premium saving may be buying more claim-month stress than you can carry. |
| You do not know the total after driver-specific additions | The quote is not ready to compare. |
Quote worksheet
- Annual premium after comparable discounts: S$_____
- Basic excess: S$_____
- Additional excess for each actual driver: S$_____
- Other excesses that may apply: S$_____
- Maximum total you may bear in the tested scenario: S$_____
- Premium saving over your comparison period: S$_____
Keep coverage type, drivers, authorised workshops, optional covers, and declared use aligned. If those differ, the premium-versus-excess calculation does not describe the whole contract. Use the quote-normalisation worksheet before choosing.
FAQ
What is car-insurance excess?
Excess is the portion of an applicable claim that the policyholder must bear under the policy terms. The amount and circumstances are set by the schedule, certificate, endorsements, and policy wording.
Can more than one excess apply to a claim?
Yes. A standard excess and an additional driver, age, experience, or other excess may apply together, depending on the policy. Ask the insurer for the total in each real-driver scenario.
When is a high excess financially sensible?
A high excess can be sensible when the premium saving is meaningful, you have enough accessible cash to pay the full applicable excess, and the retained claim risk fits your tolerance.
How should I compare high- and low-excess quotes?
Compare total premiums over the period, then add the full applicable excess for zero, one, and two claim scenarios. Keep the coverage, drivers, workshops, and other terms equivalent.
Sources
- General Insurance Association of Singapore — Motor Insurance Consumer Guide
- Income Insurance — Drivo full-coverage product information
- Income Insurance — Drivo private-car policy conditions
Last updated: 22 Sep 2026 · Editorial Policy · Advertising Disclosure · Corrections