MORE and more people know just what to look for when it comes to choosing a motor insurance policy - but there are still a few diehards who need some education on the subject.

The General Insurance Association of Singapore (GIA) says a growing number of motorists have become well-informed about the range of insurance products available and their benefits.

'This group is not entirely price-driven when it comes to choosing the product that meets their needs,' says GIA president Derek Teo.

'They want to know, for example, the amount they have to bear on accident repair to their own vehicles, and whether they will be allowed to repair the damaged vehicle at a workshop of their choice,' he points out.

People started showing more interest in insurance products about five years ago when the-then loss-making motor insurance industry took steps to turn around the bleak situation, says Mr Teo.

Motor insurers suffered losses for more than a decade because of inflated claims and runaway third-party costs, he says.

These peaked at a record $120 million in 2002.

The industry finally responded by raising premiums, but at the same time, attractive features were dangled to make the hikes more palatable.

The drastic step worked. In 2004, insurers turned in a profit of $10.8 million on total premiums of $680.7 million.

The underwriting profit was even healthier in 2005 at $46.3 million, but this lured back insurers who had earlier abandoned the motor portfolio after suffering losses.

In 2006, the industry went back into the red with an underwriting loss of $625,000 amid a price war.

'Over the last five years when motor insurers began to impose terms, people realised that different insurers offered different motor products,' says Mr Teo. 'The cheapest is no longer necessarily the best for motor cover.'

The differences include service standards, as well as tangible benefits such as varying deductible (excess) amounts, different accident repair options, use of a courtesy car, windscreen damage and personal accident cover.

For example, the excess amount varies from insurer to insurer, and even between different drivers under a policy.

Different policies also specify where motorists can send their vehicles for repair.

A policy with a lower premium tends to have more restrictions.

Some insurers also offer free use of a courtesy car when a damaged vehicle is under repair; others do not.

Sometimes, there is a provision for unlimited reinstatement for windscreen damage.

That is, there is no additional premium charge for more than one claim in a year.

And finally, personal accident cover can range from $5,000 to $50,000, with some policies even providing the same benefits for passengers.

Mr Teo says GIA members no longer sell the same 'apples' when it comes to motor insurance; some sell 'oranges'.

'The market has changed,' he says. 'We urge all motorists to shop around when it comes to buying motor cover. In the end, it will mean they get a better deal and an enhanced customer experience.'

As for those who refuse to evaluate the differences, GIA will continue its efforts to educate them.

'Unfortunately, some go mainly on price alone and don't look at the benefits,' says Mr Teo.

'They will only learn after a painful lesson. A price difference is there for a reason.'