What Are The Types of Car Insurance in Singapore?

What are different types of car insurance available in Singapore?

There are three main categories of motor insurance. Each category provides different coverage, affecting your right to claim should an accident occur:

(Most car owners in Singapore opt for the Comprehensive Cover, as it gives the best protection)

1: Third Party Only Coverage, which covers:

– Death or injury to other parties
– Damage to other parties’ property

2: Third Party, Fire and Theft Coverage, which covers:

– Death or injury to other parties
– Damage to other parties’ property
– Fire damage to, or theft of, your vehicle

3: Comprehensive Coverage, which covers:

– Death or injury to other parties
– Damage to other parties’ property
– Fire damage to, or theft of, your vehicle
– Accidental damage to your vehicle
– Personal accident cover (for private cars only)
– Medical expenses (for private cars only)

Optional Benefits for Comprehensive Policies
(which may be subject to payment of additional premium)

– Windscreen damage
– Damage arising from riot, strike and civil commotion
– Damage arising from flood and windstorm
– Liability of passengers for acts of negligence
– Personal accident benefits for passengers
– Additional excess
– No-Claim Discount protection (for private cars only)

These Optional Benefits may seem like icing on the cake, but you may find them important nevertheless. Many reputable insurers include these benefits into their coverage while others don’t.

If you feel that these optional benefits are important to you, you can add them as Riders inside your car insurance policy. Nevertheless the total car insurance premium may increase as a result.

Note: You can only sign up for a Third Party Only motor insurance if your car is fully paid up. And if you want to get a TPFT (third party fire & theft) policy, you have to seek the approval of the Hire Purchase company first.

What is "No Claim Discount" AKA NCD

A No-Claim Discount (NCD) entitles you to a lower car insurance premium. The maximum NCD you can have is 50% and the lowest is 0%. Thus the discount you get depends on how high your NCD is. This is one of the ways you are rewarded for being a safe driver.

If you have not made any insurance claim in the past 1 year, your NCD will increase by 10%. The 2 tables below illustrate this:

For Private Cars:
Period Without Claims NCD on Renewal
1 year 10%
2 years 20%
3 years 30%
4 years 40%
5 years or more 50%
For Commercial Vehicles and Motorcycles:
Period Without Claims NCD on Renewal
1 year 10%
2 years 15%
3 years or more 20%

With the above in mind, it does not necessarily mean you will lose your NCD if you make an insurance claim.

In Singapore, insurers depend on a benchmark known as the Barometer of Liability Agreement (BOLA) to determine what your responsibility is for each accident you get into. As long as it is less than 20%, your NCD will not be affected.

Otherwise your NCD may drop by 30%, as illustrated in the table below:

Current NCD NCD on Renewal
50% becomes 20%
40% becomes 10%
30% or less becomes 0%

There is a common misunderstanding about No-Claims Discount you must know about. People are often confused whether their NCD applies to them or their vehicle.

Technically, your NCD applies to you. This means whether you switch to another insurer or buy another vehicle, your NCD remains with you. Nevertheless if you own a second car, the NCD for that vehicle will have to start from 0%.

In other words, your NCD can be transferred from one insurer to another and from one car to another. But it cannot be transferred from one person to another.

(NCD also cannot be transferred from one vehicle class to another. For example, you cannot transfer your Motorcycle’s 20% NCD to your Car or vice versa.)

If you are concerned about losing your NCD in case of an accident, you can buy an NCD protector. Most insurers only allow you to buy this rider if your NCD is at 50%. With this, even if you make an insurance claim, your NCD will not drop.

However you have to bear in mind that your NCD protector cannot be transferred from one insurer to another. This means if you want to retain your NCD at 50% after an accident, you have to renew with your existing insurer.

Finally, if you don’t own a car (or vehicle) for more than 12 months, you will lose your NCD. For example, if you sold off your car and went overseas, then bought a car again after more than 12 months, your NCD will start from 0% again.

Can Policy Holder Protect Their NCD?

As NCD is considered valuable, it is indeed necessary for the car owners to protect it.
In an event that they have successfully managed to make no claims after their car insurance plan has been in effect for 5 years, the car owners will gain eligibility for an NCD of 50%.
When this happens, car insurers will usually be pleased to offer them protection against their discount losses.
Some insurer allows drivers to buy NCD Protector if driver attain 30% NCD onwards.

By simply paying a small extra premium, car owners will be eligible to make a claim during the year.
Yet, they will still have their discount protected in full. The protection of 50% NCD is as follows.

For Private Cars Only:
Claims within the Insurance Period Renewal NCD
1 50%
2 20%
3 or above None

Does my NCD apply to Vehicle or to Policy Holder?

In principle, your NCD applies to you and not to your vehicle. For example, if you sell your vehicle and buy another one, you will retain your NCD. However, if you own more
than one vehicle, you might have a different NCD for each vehicle. You should check the details with your insurer, but generally:

Your NCD can:
Be transferred to another vehicle owned by you, but it can’t be applied to more than one vehicle at any point in time. For example, if you have accumulated a 30% NCD while
using one vehicle, it does not follow that the same NCD applies to any other vehicle that you own or decide to buy. In other words, you will have to earn the NCD for each
vehicle separately.

Your NCD can’t:
Be transferred to another person.

Will I lose my NCD if there is a break in ownership of my vehicle?

Most insurers in Singapore will allow you to keep your NCD should there be a break in ownership for up to 12 months. Some insurers set the
time frame at 24 months if driver buy back with the same insurer. You should contact your insurer for details.

What’s the difference between "Authorised Workshop Scheme" & "Any Workshop Scheme"?

In Singapore, there are two types of comprehensive motor insurance scheme.

Authorised Workshop Scheme or Any Workshop Scheme.

Authorised workshop scheme has lower premium because the insurer has control of the repair cost with appointed panel of workshops.
Some insurer will waive off 50% or 100% of the excess if you repair at insurer’s authorised panel.

Any Workshop Scheme allows drivers to go to any workshop of their choice.
Perhaps they know of reliable or trustworthy workshop.
Drivers usually opt for “any workshop scheme” because they bought brand new cars and it allows them to go back to dealership for repair.

What are the factors affecting your premium?

An insurance company considers many things when calculating an insurance premium. Most premiums are based on basic third party cover with the cost of
extras added on. The main thing that will determine the cost of your insurance is what you actually want to be covered for. The following are always taken into account:
Whether you are driving on a full or provisional licence makes a huge difference to the cost of your motor insurance premium. You can expect to pay hundreds more in extra,
if you only have a provisional licence.

Size and age of car
The engine capacity and age of the car play a large part in determining the cost of your premium. The older the car, the more difficult it can be to insure. Many insurance
companies believe that the older a car is, the more accident-prone it becomes. A new car is more expensive to replace than an old car and will cost more to insure. Likewise,
the more powerful the car you drive, the more it will cost to insure.

Age of the driver
The young and the old represent high-risk categories and pay more for insurance.
Value of the car
The value of a car is taken into account for third party, fire and theft and for comprehensive insurance. What you have the car insured for, however, is not always what the
insurance company will pay out in the event of a claim. In the event of the car being a write-off, the insurance company will only pay out what it feels the car is worth, which,
more often than not, is less than the car is actually insured for. There is very little to gain by over-insuring a car and, equally, you should not under-insure it either.
All insurance companies will ask if you have ever had insurance in your own name before. If not, they will ask if you have ever driven under someone else’s insurance
without incident. This will be taken into account when calculating a premium. Insurance becomes less expensive with experience and a clean driving record.
Profession and/or Usage
Some professions are considered to be more at risk than others and will have a loading put onto their premium. What the car will actually be used for is also taken into
account. A standard policy covers the vehicle for social, domestic and pleasure purposes, but not for the carriage of goods. If the car is being used for business, then a
loading will apply. If the car is being used commercially, then an even higher loading will be imposed.
Excess and extras
Most insurance policies contain some type of an excess clause. This means that the policyholder is liable for an agreed amount towards the cost (e.g., the first $550). The
premium will cost more if this clause is taken out. It pays to shop around, because what might be considered an extra in one company (windscreen breakage, car hire in the
event of the car being off the road, loss of personal effects, etc.) could be standard in another.
No claims bonuses
A no claims bonus is built up over the years and gives the policyholder a substantial reduction in the cost of his or her premiums. The ceiling for a no claims bonus is usually
50%, leaving someone who has never had a claim without it affecting your no claims bonus.

Why is that my renewal premium is higher even though I did not make any claim?

Insurance is based on the concept of pooling of risks. If the overall claims experience is bad, premiums will be increased across the board for all motorists
irrespective of whether a claim is made or not. However, the premium increase borne by those with a clean driving record will be lower than those with accident
claims because the latter will have an additional loading on the claim and thereby pay even more.

What is excess?

Excess, also called deductible, is to the first amount of the claim which the insured has bear. If the insured has an excess of $500 and the total repair costs
$5,000, then the insured has to pay $500 while the insurer pays the remaining $4,500.

Why should there be an excess?

The insurer normally imposes some excess as this would serve as a form of co-insurance.
With an excess, the insured would tend to be more careful because if a claims occur, the insured also has to be out of pocket and contribute towards the claim.
Claim payouts are reduced by the excess amount, the risk/liability of the insurer is also reduced and thus lowering the overall insurance premiums.

In a nutshell, excess is to deter small claims.
Every claim will incur administrative and surveyor cost and it is not cost effective to administer small claims.

Is My Car Covered In Malaysia or Thailand?

Most of the insurer will cover your motor vehicle in West Malaysia.
If you cross the border into Thailand, you will still be covered up to 50 miles (80.5 km) of the border between Thailand & West Malaysia.
Some insurer covers Peninsular Thailand but subject to a maximum period of 14 days for each and every trip.

If I Made A Claim For Windscreen Damage, Does It Affect My NCD?

Windscreen damage claims will not affect your NCD.
But typically there is an excess of $100+GST.

Windscreen refers to front, side, rear back and quarter
glass but not the sunroof or any glass roof of the vehicle.

Some insurer will covers original factory fitted Sunroof/Moonroof.
If your insurer don’t cover Sunroof/Moonroof, you might need to make “Own Damage Claim” where basic excess applies.
For after market Sunroof/Moonroof, insurer requires additional premium to cover it.
Please check with your insurer.

Some insurer have engage external windscreen specialist to repair “minor cracks” at your doorstep.
As this will save the insurer significantly therefore insurer usually waive off the excess of $100+GST.


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