What is Private Car Insurance?
Having car insurance offers you protection while you are on the road. Car insurance could cover or lower your costs of car damage. It encompasses everything from your car encountering falling objects to getting stolen or vandalised. The cases when the car catches fire or is damaged because of floods and lightning, are accounted for too. Not only this, the insurance also covers any third-party injuries or property damage if the driver is liable for it.
In Singapore, where car prices are some of the most expensive in the world, cars are not seen as solely transportation apparatuses but are viewed as an asset. It would make sense to protect your asset by insuring them.
Do I need Car Insurance?
All vehicles are legally required to have motor insurance coverage to be driven in Singapore. Motor insurance is a prerequisite before you can renew your road tax. Your insurance must cover the entire road tax renewal period (usually a full year) before you can renew. The insurance must at least cover third-party liability such as deaths and bodily injury injuries and property damages. This is important so that victims of a traffic accident are covered by insurance
It is an offence to use a vehicle without valid insurance coverage. The penalty for this offence includes a fine of up to $1,000 or imprisonment of up to 3 months or both, and a mandatory disqualification from holding a driving licence for at least 12 months.
What are the 3 types of Car Insurance?
Third Party Only (TPO)
A Third Party Only policy offers the least coverage and is also the cheapest option. It offers you protection in situations where you are held responsible for an accident, either third party property damages or third-party bodily injuries. These third-party liabilities include damages to any property involved during the accident – including vehicles, trees, or even lamp posts, as well as medical/ hospitalisation expenses or other injuries sustained during the accident by the victim. This includes loss of wages and loss of use.
Third Party, Fire and Theft (TPFT)
This provides slightly more coverage as compared to TPO policies. Besides the third-party liabilities mentioned under TPO coverage, it covers your vehicle for events such as Fire or Theft. If you are a frequent driver who drives outside of Singapore, it is strongly advised that you purchase a Third Party, Fire and Theft cover as theft frequencies are higher.
This is the most superior form of coverage as well as the most common. It not only covers the areas mentioned under TPO and TPFT policies, but also offers protection to the car itself. Coverage includes damages to the car body, windscreen and convertible soft top cover. Besides the policy excess, which the driver must bear, a comprehensive policy will pay no more than the vehicle’s market value of the damages incurred at the time of loss or said damages.”
If the car is under financing, like on a bank loan, the bank will usually enforce that comprehensive insurance is purchased for the vehicle. This is because said bank needs to protect their assets: the car, which they legally have ownership over until the loan is fully paid.
The high cost of cars in Singapore means that a large proportion of cars are on bank loans, making comprehensive policies the most common form of car insurance in Singapore.
How much does Car Insurance cost?
There are many factors that contributes to the car insurance premium, to list down some key factors such as:
Older drivers will generally pay much less than young drivers as they’re seen to have more experience.
Experienced drivers with no claims will typically pay less than new drivers and young drivers as they present a lower risk.
Avoiding points on your licence helps keep your premiums low, as convicted drivers are considered a higher risk, thus incurring higher premiums.
Your claims history, including any no claims discount, can make your premium cheaper.
Adding a named driver to your policy could mitigate your risk and decrease your premium if they are an experienced driver with no claims.
The amount of money you elect to pay towards any car insurance claim. The higher this excess, the lower the price tends to be.
Insurers have a panel of authorised workshops which it has certified as legitimate and affordable. Choosing insurer “Authorized Workshop” plans are always cheaper as opposed to “Any Workshop” plans.
What other types of vehicles have motor insurance coverage?
Some of the most common vehicle insurance types, after private car, are:
Commercial Vehicle Insurance is coverage for business-use vehicles, oftentimes industrial and load-bearing. This can include trucks, lorries, vans, trailers, buses and coaches.
Supercar Insurance is an insurance policy designed to cover the different risks of owning and driving a high-performance car. These cars range from high to extremely high in value and have a low volume of production.
Electric Vehicle Insurance covers all vehicles with an electric battery and electric motor as its propulsion system. As the industry, infrastructure and production lines are still in their infancy, insurance for such “new” forms of electric transport is even tailing behind.
Frequently Asked Questions
About Motor Insurance In Singapore
- Most comprehensive motor insurance offers coverage on loss of personal belongings (i.e. phones, laptops, cameras) as an add-on. If you have opted for such an add-on, loss of personal effects is covered in the event personal belongings are stolen due to forced entry into the motor vehicle. The incident will have to be supported by a police report.
What isn’t covered in insurance are not limited to the following:
- Wear and tear
- Mechanical breakdown
- Damage due to illegal activities (driving under the influence, road racing)
- Damage caused by drivers without a valid licence
- Damage due to overloading
- Damage due to intentional acts
- Damage due to unapproved modifications
- In the event you are involved in a car accident, you are required by your car insurance company to file an accident within 24 hours.
Call eazy’s 24/7 Accident Assistance emergency hotline at +65 6333 2222. A reporting officer will go to the scene and file an accident report for you on the spot. If you have left the site, you can arrange for the reporting officer to meet at your preferred location.
- Yes. The LTA (Land Transport Authority) states that all vehicles should have motor insurance coverage before they can be driven in Singapore. It is also a requirement for your car to be insured for the entire road tax renewal period before the road tax can be renewed. The minimum coverage required is a third party only policy which covers injuries or damages caused to third parties.
- No. Unlike life insurance policies which are on an auto-renewal basis, automatic renewal of car insurance is not common in Singapore (though some insurers offer this). We believe that clients should be able to choose and review their policy with their insurance company before renewing.
- Excess refers to the amount of money that the policyholder must pay out-of-pocket towards a claim before the insurer will cover the remaining cost. In Singapore, car insurance policies typically have a standard excess amount, but policyholders may have the option to increase or decrease their excess amount in exchange for a change in their insurance premiums.
- Yes, you can purchase additional coverage for your basic car insurance. This is known as add-on or extension coverage.
Some common types of add-on coverage for car insurance in Singapore include:
- NCD Protector: Protects your No-Claim Discount (NCD) in the event of an accident or claim.
- Personal Accident: Provides coverage for death and permanent disabilities sustained in the event of an accident.
- Loss of Use: Reimburses you for the cost on loss of usage while your car is being repaired in the workshop
- Replacement Car Coverage: Provides a replacement car to use while your car is being repaired in the workshop.
- Accessories Coverage: Covers the cost of repairing or replacing accessories that are damaged in an accident.