“Should I buy car insurance in Singapore?” This is a common question among many Singaporean car owners. Many people aren’t sure whether auto/motor insurance is compulsory in the country, and others would prefer to just insure themselves.
The truth is, yes, the Singapore government requires motorists to get a car insurance policy to protect themselves, other road users, and public property.
Anyone who is found driving a vehicle without insurance coverage may face legal consequences. According to the Motor Vehicles (Third-Party Risks and Compensation) Act, you have to pay a fine of up to S$1,000, serve for up to 3 months in jail, or both if you get caught driving uninsured.
Let’s take a look at the three kinds of car insurance in Singapore.
Which Car Insurance Should You Get?
1. Third-party Only Insurance
In Singapore, all drivers should hold at least a third-party only insurance (TPO) to manage damage costs done to a third party.
This insurance type covers third-party bodily injury, death, and vehicle damage. For instance, you’re a newbie driver, and you accidentally hit a parked car. Will you pay out-of-pocket for the damage? The answer is no.
Since you have TPO, the insurance company will cover the accidental damage caused to the third party. The bad news, however, is that the insurer will not cover the damages to your car. You will shoulder your car repair costs because you only hold third-party insurance.
2. Third-party, Fire & Theft Insurance
Like TPO, the third-party, fire, and theft insurance (TPFT) plan offers the same cover for death or injury to other parties and damage to someone else’s property. The only difference is that it can also cover you against fire, car theft, and attempted theft.
Let’s put it into perspective. Suppose you went to a secluded area for a business trip and parked your car in a vacant lot. While you’re away, a group of youngsters lurked around your car, vandalised it, and attempted to steal some of your car parts, causing minor damage to your vehicle.
If you hold this car insurance in Singapore, you’re free from the troubles of paying for the repairs to your own car. The same thing also applies when your auto is stolen and not recovered or damaged due to fire.
3. Comprehensive Car Insurance
Comprehensive car insurance is the most expensive option out of all the plans. While its cost is higher than TPO and TPFT, a comprehensive plan provides extensive coverage—including what’s covered and not covered in the other two policies.
Here are the things covered when you insure your vehicle with a comprehensive plan:
- fire damage to, or theft of, your vehicle
- legal liability to third-party death or disability
- legal liability to third-party property damage
- damage arising from a riot, strikes and civil commotion
- damage to your car due to accidental collision and natural disasters
However, comprehensive car insurance also has exemptions, such as:
- Cars that are more than 10 years old can’t be covered by comprehensive insurance.
- The policy doesn’t cover damage to vehicle parts made from fibre or rubber.
- Damage caused by normal ageing and wear or tear isn’t also covered.
Any claims made in a situation where you drive under the influence of alcohol, drive without a license or a valid license holder, and share responsibility for the accident (contributory negligence) are also excluded in a comprehensive car insurance plan.
One More Thing to Know
When you get a car insurance policy, you are by default the “named driver”. This means that all the benefits from the insurance will only apply to you.
In case an unnamed driver uses your vehicle and causes an accident, the excess incurred increases. Excess is the amount that you would pay to make a claim.
To avoid paying high excess, consider adding other drivers to your plan. Most insurance companies allow 3 to 5 named drivers for free, as long as they’re at least 27 years old and have a minimum of 2 years of driving experience.
Besides the fact that car insurance in Singapore is mandated by the law, having one also protects you from liability costs, if in any case, you get into a car accident. It also provides you with extra financial protection against car theft, as well as third-party injury and third-party damage.