FAQ – Your Car Insurance Questions Answered

Yes, it is compulsory for every car driven on Singapore roads to be covered by motor insurance. It covers the driver’s legal liability for damage to property belonging to other persons. It also includes the driver’s legal liability for bodily injuries or death to passengers and third parties.

Third Party Only coverage is the legal minimum level of insurance available within Singapore.

It is an offence to use a vehicle without valid insurance coverage.

There are 3 types of car insurance in Singapore –  Third Party Only (TPO), Third Party, Fire & Theft (TPFT) and Comprehensive coverage. Third Party Only insurance is the most basic level of car insurance cover available and this is also the minimum level of insurance coverage required by the law for all car owners

Details of coverage are stipulated in the table below.

Third Party Only (TPO)

Third Party, Fire & Theft (TPFT)

Comprehensive

Your Legal Liabilities

Loss or Damage to Third Party Property

Yes

Yes

Yes

Death or Bodily Injury to Third Party

Yes

Yes

Yes

Your Vehicle

Accidental Loss or Damage by Fire

Yes

Yes

Loss or Damage by Theft

 –

Yes

Yes

Accidental Loss or Damage by Other Insured Causes
(including collision of vehicle)

Yes

On top of the basic coverage stated above, some insurance companies also have other additional coverage in their policies.

Most insurers in Singapore adopt a “risk factor rating system” when setting your premium. Every insurance company has their own method of calculation.

Some of the common factors taken include:

  • Type of car (i.e. Make, Model, Engine Capacity, Age of car.)
  • Policyholder/Driver’s profile (i.e. Age, Gender, Marital Status, Driving experience, Occupation.)
  • No Claim Discount or No Claim Bonus (NCD/NCB)
  • Claim history of drivers (i.e. Number of claim/accident incidents, claim amount of each incident, and if the incident is “at-fault” or not)
  • Coverage Type

NCD stands for No Claim Discount and NCB stands for No Claims Bonus.

NCD is awarded to a policyholder if there are no claims (or incidents that can lead to a potential claim) to the policy for 1 year or more. It is a form of recognition or discount given to policyholders who have kept their vehicle safe on the road. In general, the higher the NCD/NCB, the lower the premium.

Period of insurance with no claim NCD/NCB upon renewal
1 year 10%
2 years 20%
3 years 30%
4 years 40%
5 years or more 50%

If you are found totally not “at-fault” in an accident involving an identified vehicle your NCD may not be affected.

Do note that the determination of which party being “at-fault” is not by the parties affected in the incident, but by the insurance companies following a set of standard guidelines or by the court for some cases.

Windscreen damage claims will not affect your NCD.

Current NCD

NCD at renewal

 NCD after One claim

NCD after Two or More claims

50%

20%

0%

40%

10%

0%

30-10%

0%

0%

The NCD is linked to you and not to your vehicle. If you sell your vehicle, the NCD will stay with you. Should you buy a new car subsequently, the same NCD will still applies.

Most insurance companies allow policyholders to retain their NCD for 12 months, while some insurance companies even up to 24 months.

Contact our specialists at SGP Car Insurance and we will be able to provide you with more details.

If you have accumulated your NCD to between 30% – 50%, most insurer will allow you to buy protection against the loss of the NCD by paying extra premium. This is an optional benefit.

Unlike NCD, the protected NCD is not transferrable to another insurer.

NCD Protector does not protect you against the non-renewal or cancellation of your policy.

Current NCD

NCD Protector

 NCD after One claim

NCD after Two claims

50%

50%

20%

40%

40%

10%

30%

30%

0%

You can check your No Claim Discount (NCD) with your insurance agency or with your current insurance company .

This is an amount that is payable on top of the regular standard policy excess. It is applicable in respect of a claim for loss or damage when the insured vehicle is driven by any person (other than the policyholder and named drivers) who is under a stipulated age or has a valid driving licence less than the stipulated years as determined by the insurer.

Excess is the amount the policyholder has to bear on his/her end the in event of a claim. The insurance company will bear for the remaining claim amount after the excess. Example: If the claim amount is $8,500 and the Excess is $1,000, it means the policyholder will have to bear $1,000 and the insurance company will be responsible for remaining amount which is $7,500.

(This is subjected the maximum liable/payable limited, if any, stated in the policy for that particular claimable benefit/coverage.)

Car Insurance is about pooling of risks. It means that the insurer pools together all the premiums collected from their policyholders, and pays it out to policyholders who claim for damages and injuries.

A pool with high claims experience will have higher premiums thus affecting safe drivers.

Let SGP Car Insurance get you a cheaper premium.

Authorised workshop = Accident repairs at one of the workshops appointed by the insurer.

Any workshop  =  Accident repairs at the workshop of your choice.

When it comes to accident repairs, the insurance companies will prefer you to choose from their list of authorised workshops as this cuts down on their costs, hence they are able to offer a cheaper premium than the any workshop plan.

Any workshop plan generally cost 15% – 33% higher than the authorised workshop plan.

This is the assessed value of the insured car at the time of loss or damage. It is arrived by comparing retail prices for the vehicles of the same make, model, age and of similar condition.

Most car Insurance provides coverage for accident, loss, damage, injury or legal responsibility arising within

the following Geographical areas: Singapore, West Malaysia and part of Thailand within 80 kilometres of the border between Thailand and West Malaysia.

Not all insurers in Singapore covers the above mentioned risks. However, you can let us know if you need this coverage specifically.

While some policies do cover against theft of personal belongings resulted from car break-ins, many policies do not. Most Comprehensive insurance policies are designed with the objective of vehicle coverage and not against loss of personal belongings left in the car.

  • Stay calm.
  • Call 995 for an ambulance if someone is injured.
  • Do not move the vehicles unless absolutely necessary.
  • Take photos of the accident scene and the damage to all vehicle involved.
  • If towing is required, please call the insurer hotline.

You are required to report to your insurer within 24 hours or by the next working day.
Make a Police report as soon as possible or within 24 hours of the accident if it involves:

  • Fatality
  • Foreign vehicle
  • Pedestrian or cyclist
  • Hit-and-run case
  • there is an injured person
  • Damage to Government property

Late reporting may result in losing your No Claim Discount when renewing your policy. The insurer is entitled to repudiate liability, cancel the policy or even decline to invite renewal of policy.

You should report an accident within 24 hours or by the next working day. No matter how minor or even there is no visible damage and irrespective of whether you will be making a claim against your policy or third party.

The Main driver is usually the policyholder and the vehicle owner.  If the vehicle owner is the policy holder but does not possess a valid driving licence, the main driver would need to be another person that is appointed by the vehicle owner.

Named drivers are persons whom the policyholder has declared that are allowed to drive the vehicle. They are also covered by the policy .

Most insurers will cover persons that have been authorised by the policyholder to drive the car even if they are unnamed in the policy.

Some insurers offer cover for modified vehicles as long as they are compliant and approved by LTA and however they will pay only for the factory fitted standard equipment done by the manufacturer or distributor in the event of an accident claim.

A handful of insurers will covered the modified parts with an extra premium.

There are a few insurers that do no wish to insure modified cars.

It is better to obtain approval from the insurers before purchasing the policy or carrying out the modification.

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