Car insurance should be something every car owner should have. It’s so important that in Singapore, it’s a must, which means that as long as you own a car in Singapore you must also have car insurance.
Driving on the roads of Singapore without car insurance could cost you up to $1000 which is paid as a fine, you could get incarcerated for up to 3 months, and in the worst scenario, you’ll get fined and still be incarcerated. Additionally, you could also have your driving license revoked if you are caught driving around without car insurance.
Asides from the penalties you get to face, driving around without car insurance is very risky because if you get involved in a car accident, the expenses that follow afterwards could make you go bankrupt that’s why every car owner should have car insurance. If you recently got a car in Singapore and you are clueless when it concerns car insurance then you have made to the right blog post because, in this guide, you’ll learn the important things you should know about car insurance in Singapore.
Types of car insurance in Singapore
In Singapore, it’s mandatory by law that every car owner must have car insurance. Regardless of the company you choose as your insurer, there are 3 basic types of insurance plans in Singapore which include Third Party Only (TPO), Third Party, Fire and Theft, and Comprehensive Car Insurance.
Now let’s take a look at each plan one after the other.
Third-Party Only (TPO) Car Insurance
This is the most basic insurance plan one can buy and also the minimum plan anyone can purchase in Singapore. This car insurance plan only covers the affected third parties as well as liabilities.
Third-Party, Fire and Theft (TPFT) Car Insurance
This is car insurance plan is pretty much like the first one with a few additional benefits. With this plan, any loss or damage to your car as a result of fire or robbery will be covered.
Comprehensive Car Insurance
This is an all-encompassing car insurance plan that covers not only you but your vehicle, passengers as well as minor liabilities and grievous accidents.
There are a few terms in car insurance you should know as a brand new car owner or driver because your knowledge and use of these terms will significantly affect your annual premium – it largely depends on how well you’ll be able to customize your policy.
An insurance premium is a monetary amount you’ll have to pay for an insurance policy. Depending on your agreement between you and your insurer, premiums may come in as monthly instalments. The price for premiums aren’t fixed, they largely depend on factors like your age, the type of plan you choose, car model and make, etc.
After selecting a car Insurance plan or coverage for yourself, an excess is the fixed sum of money you’ll have to pay for damages by yourself before the insurer can come in to cover the rest. For policies with a higher excess, their premiums are lower and vice versa. Sound great right? It sounds and looks great up until you run into an accident to find out that you are holding the shorter end of the stick (paying the larger sum). Hence you should also put this into consideration while selecting your car insurance coverage.
No Claims Discount (NCD)
The NCD is a reward offered by the insurer to the insured in the form of discounts. Here, your insurer gives you a discount on your premium the following year if you haven’t made a claim in the previous year. If you happen to have made a claim during the year, it’ll only lower your discount percentage and it largely depends on your insurer’s criteria.
Main and Named Driver
The main driver is the one to be insured while the named driver is the one recognized by insurers to drive the car. The main driver is the one covered by the insurer’s policies while the named drivers can also share in the benefits enjoyed by the main driver by virtue of being included by the main driver. Adding a named driver will reduce your financial risk but it can also impose a higher excess on your claim if you should encounter an accident.
Congratulations! On reaching this point, you are halfway ready to obtain a car insurance plan of your choice in Singapore. If you are still confused then it’s about time you hired the services of an insurance agent Singapore (i.e., an insurance agent resident in Singapore) to help you in selecting the best car insurance policy for you.