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Where Does My Car Insurance Money Go?
Being a Young and Inexperience car owner, car insurance Singapore can be an expensive purchase. It will be worse if a claims occurs. It will be interesting to know what happens to the money you spend on your increasing premium?

How your car insurance company spends your money
The premiums you pay to your insurer are not simply held to one side in the event that you need to claim on them; instead, it all goes into one lump sum which the company uses in several different ways. Approximately 50% the pot is taken up by paying out on claims, and the other half is split equally between administrative and legal costs and the general day-to-day running of the business.

These numbers vary depending on the insurer; some companies keep their overheads lower, or save more money on premiums each month, but that is roughly how the money is split.

What sort of claims cost car insurance companies the most?
Damage to cars involved in collisions make up around half of an insurance company's expenses, and a huge amount of money is also spent on medical expenses and personal injury claims (the costs of which are ever increasing). This is why fully comprehensive cover is so expensive - people who hold these policies can cost insurers a great deal if they have an at-fault accident.

Insurers also spend a great deal of money processing and settling claims - there are legal costs involved in doing so, and disputed claims can take a long time to settle. Insurers also have other staff to pay, advertising to produce, and physical properties to maintain.
     
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