Motor insurance is compulsory in Singapore. If you are caught driving on the roads without valid motor insurance or road tax, it is an offense and you have to pay stiff fines.
As Singapore cars are so expensive, we like to cut costs and save on motor car insurance. You can choose the most suitable car insurance that suits your lifestyle and needs and try to get the lowest premium you can get from competitive car insurers.
Third Party Motor Insurance
This is the minimum car insurance coverage that is mandatory in Singapore. Third party car insurance is most basic as it covers damage to a 3rd party that is involved in a car accident with your car. It will help to ensure that the third party can seek compensation for any car incidents. This third party car insurance only covers the other party and does NOT cover your own car.
If your car meets an accident, your car is not covered and you have to pay for all the repairs on your own.
Who should buy third party motor insurance?
if your car is old and difficult or expensive to repair, you may just choose third party car insurance. In the event of any accident, you can forgo the repairs and just scrap the car to get back the PARF value from LTA and scrap metal value from any dealers.
Third Party Fire and Theft Insurance Plan
Third Party Fire and Theft is the middle ground between third party basic insurance and comprehensive motor insurance. It covers all the third party cover with an additional cover for damage and losses caused by Fire and Theft.
You may opt for this if you prefer to have basic 3rd party, without the full frills of comprehensive auto insurance, but you still want peace of mind from theft or fire on your vehicle. This is understandable because there is still theft and fire damage on car in Singapore despite our low crime environment.
Comprehensive Motor Insurance
Comprehensive motor insurance is the more common car coverage for Singapore motorists. It covers damage to third parties as well as on YOUR car. In any accident, your car can claim for the repair bills done to your car. As most cars in Singapore are expensive, it is quite necessary to purchase this type of car insurance.
A simple bumper repair or scratch paint job will costs thousands, usually more than your one-year car premiums. It is not a surprise this is the more commonly bought car policy.
One additional common benefit is the provision of a temporary rental car if your car is in the workshop for repairs due to an accident. It may also provide simple benefits for serious injury or death of the driver in any accident.
Who should buy comprehensive motor car policy?
Most car motorist that wants to maintain and care for your care for the long run should purchase this. It covers for repair bills on your car if you encounter any car accident.
What about car insurance workshops?
Do i go for Approved Workshop plans or Any workshop plans? The difference is usually a hefty increase in premiums for those plans that allow you to visit any car workshops with no restrictions. If you prefer lower premium you may want those plans that have a smaller list off authorised or approved car workshop. The quality is good just that you have only these workshops to visit for your car insurance company.
Any WorkShops Plans
This type of plan has no limit to which workshop your car must be sent for repairs. As there are no restrictions and does not monitor what authorised workshop is allowed, usually these plans are more expensive than Authorised Workshop or Appointed Workshops’ plans.
Insurers’ Appointed or Authorised Workshops
Each insurer may have a list of authorised car workshops that you can send your cars for repairs. For such plans, you are not allowed to send the cars to non-authorised workshops. The insurers keep a tab on these car workshops to ensure they do not jack up repair fees unnecessarily and keeps cost down.
Your premium for such plans are a lot lower.
NCD or No Claims Discount for Motorist
In Singapore, the insurers have combined to offer NCD or No Claims Discount for motorists. If you go through a year of car insurance with no claims on your policy, you get a 10% discount on your next year premium. If you go through a 2nd year with no claim, this NCD will climb to 20%. It will increase by 10% every year to a maximum of 50% NCD.
If you file a claim, you will automatically lose the NCD, and you have to climb from 0% to 10% to 20%, 30%, 40% till 50% again. Hence many motorists tend to ignore small damages or pay out of their own pockets to keep the 50% NCD. This may be more worth it, in the long run, to keep their insurance costs low.
Of course in a major accident where the car is damaged and need high repair fee, the motorist will rather claim against his car insurance and forgo his NCD.
What is the maximum for NCD?
50% + 10% is the maximum. Though the common agreements among all the car insurers is to have a cap of 50% on the premium discount for No Claims Discount or NCD, some new insurer such as FWD car insurance, Budget Insurance, DirectAsia, GoBear Insurance, Direct Insurance, etc has tried to get more customers by offering promo discount.
Hence some entrant disrupted the market by introducing an additional 10% on the 50%. They get 50% off the premium and an additional 10% of the new premium. This 50% + 10% discount is actually smaller than an outright 60% on the premium. On a marketing side, a lot of motorists can get confused and ask for 60% NCD or 50% + 10% NCD.
You may find that a 50% NCD on many policies can be better than those 50+10 or 60% NCD. Many car insurers offer discounts or lower prices but also removed many additional features or benefits that we car motorists have taken for granted.
Do check to ensure that you are fine with fewer benefits for the lower premiums.
What about windscreen cover?
Windscreen refers to the glass panels of your motorcar. Glass can be broken easily by falling objects, such as a tree branch while your car is parked in an open air carpark. Or it can be damaged from falling stones or debris from a large vehicle in front of you. There are even cases of stones being picked up and rolled back upwards in the air by cars on road, and smashing the windscreen.
In this situation, the windscreen can be expensive to replace, but yet the pain of losing your 50% NCD is also equally sharp. You may be happy to know that some insurance plans offer windscreen cover protection where you are covered for windscreen claims that does NOT affect your NCD! Some insurers provide for free, while others require a small deductible for the windscreen.
What are deductibles or excess?
Deductible or excess is the first portion of the claims that you must pay before the insurance company starts to pay.
For example, your policy may have an Excess of $500.
This means in a repair fee of $3000, you may have to pay the first $500, and then the insurer will fork out the other $2500.
If the bill is lower than $500, for example, a bill of $350, then insurance would not kick in yet. You will pay for the bill of $350 only. This reduces insurers’ liability for every accident and allow them to keep the premium lower to reflect the excess.
There are policies that appear cheaper but they are inclusive of a high excess of $2,000 or $3000.
Do note that deductible or excess is a common term and may apply to your other insurance policies that you bought, for example, your medical hospital insurance such as CPF Medishield, your home fire insurance, your travel insurance, etc.