Remember that phase of childhood when we were fiercely protective of our favourite toy? In a similar vein, car owners have confessed of being very protective and attached to their vehicle. They leave no stone unturned to take good care of their most prized possession – their car. However, given the condition of unruly and dense traffic, car accidents are a common sight. It is true that owning a car ensures immense convenience, but also has multiple risks associated with it. Every car is vulnerable to threats like accidents, damages, theft, vandalism, natural calamities, etc. A comprehensive car insurance policy is a must-have to protect your car from every possible danger.
What is Car Insurance?
Imagine investing a considerable amount of your savings in buying a car, and then having to pay for repairing the damages caused by an accident. Awful, isn’t it? It doesn’t end here; a worse situation could arise in case your car is stolen. Now, who would want to go through such unnerving situations? An all-encompassing car insurance policy mitigates the costs associated with getting into an accident. Car owners pay an annual premium to the insurance company, instead of paying a lump sum out of their pockets for car accidents. The insurance company pays all or most of the costs associated with an accident, damage to the car and its parts or loss/theft of the vehicle.
A comprehensive car insurance policy also takes care of the damages caused to your car due to natural calamities like flood, typhoon, storm, earthquake, etc. and also anti-social activities like riots, strikes, and such like.
Why do you need Car Insurance?
Car insurance is a must-have for every car owner to protect your vehicle from a wide array of dangers and threats. A good car insurance company is sure to protect your car from the following (by providing insurance coverage for the same) -
- In case of a personal accident, coverage of a good amount is provided for the insured.
- Most insurance companies provide a towing service (up to a certain amount) in case of towing of the insured car.
- Insurance companies have many authorised motor workshops/service centers and the insured can use these workshops, free of any restrictions and at times free of cost, as well.
- In case of hospitalisation caused due to an accident of the car, the medical expenses incurred are usually covered by the insurer.
- Your car is protected from natural calamities like flood, typhoon, etc. and anti-social activities like strikes, riots or civil commotion.
- Some car insurance companies provide a free windscreen cover. This cover usually comes with the payment of a nominal excess.
- A comprehensive car insurance policy covers your car against passenger risks, and also provides coverage for legal liability of passengers caused by an accident; be it bodily injury or property damage.
- Any legal service (related to the insured car) is covered by a standard car insurance policy. The amount limit is usually set as per the rules of the insurance company.
- If you have not made any insurance claim during the tenure of your policy, on renewal of the policy you are entitled to enjoy No Claims Discount (NCD). The percentage of discount varies from one company to another.
Types of Car Insurance
There are 3 basic types of car insurance available in Singapore, which are (i) Third Party Insurance; (ii) Third Party, Fire & Theft Insurance and (iii) Comprehensive Coverage. Given below is some information about each of these.
- Third Party Insurance
Third Party Insurance is one of the most important cover under the umbrella of car insurance. It has been designed for the purpose of protecting the policy holder against any legal liability which may arise due to an accident or damage to a third party property, bodily harm to any individual like passengers / third parties or loss of life. Third party insurance is usually the least expensive type of insurance as it provides the least amount of cover.
- Third Party, Fire, and Theft Insurance
This is a comprehensive insurance plan which is designed not only to protect you from third party liability arising from an accident but also covers you for the cost of damages borne by you. In addition to providing cover for death or injury caused, this type of insurance also protects you from damages or loss caused by reasons like theft, vandalism and fire. Third Party, Fire and Theft Insurance is relatively more expensive as compared to simple Third Party Insurance, but covers you and your vehicle for a wider range of damages. It is important to note that this type of car insurance is mandatory for individuals who are in the process of financing their vehicle which is more than 10 years old.
- Comprehensive Insurance
As the name suggests, Comprehensive Insurance has been designed to protect you and your motor vehicle against a large variety of damages or threats. This particular type of car insurance is quite popular in Singapore as it provides cover for:
- Legal liability arising due to an accident resulting in bodily harm or death of any third party.
- Loss or damage caused to the vehicle, its accessories or spare parts due to theft accident or fire.
- Any medical expenses arising from the accident.
- Any damage caused to third party property.
Though a comprehensive insurance policy does cover a wide range of losses, it, however, does feature certain exclusions like the following:
- Loss/damage caused due to acts of hooliganism like strikes, riots, civil commotions.
- Loss/damage caused due to natural factors like windstorms, floods, etc.
- Any personal accident benefits or liability towards any passengers for acts of negligence.
How to make a claim against your motor insurance policy
The procedure for filing a claim varies from insurer to insurer. But, before you make a claim, it’s important to know if it’s worth filing a claim, considering the impact it will have on your no claim discount. Take some time to figure out the cost of damage repairs. If damages are minor, it’s best to avoid filing a claim and get your vehicle repaired yourself.
However, in case you choose to file the claim, here are some steps that are generally followed while filing a claim:
- Get the details of all the parties involved: When an accident happens, you are naturally stressed about the damages to your vehicle, as well as for your personal injuries. Do not panic. It’s important that you take all the details of the parties involved in the accident, so you can proceed with the insurance claim process. Also, if someone is injured, the first thing you should do is call the ambulance and the police immediately.
- Vehicle photos: Right after the accident, don’t try to move your automobile if it’s severely damaged. Take photographs.
- Take the vehicle to a workshop: While taking your vehicle to a workshop, make sure it’s authorised by your insurer. If you get it repaired from a workshop that’s not authorised by your insurer, you might not be able to claim your benefits.
How to cancel your motor insurance policy
If you wish to cancel your vehicle’s insurance policy, you can do so by simply requesting your insurer in writing. If you are cancelling the policy before it expires, you will be entitled to a refund. That refund will be determined on the basis of the remaining value of your policy. However, if you have made a claim under your policy, there will be no refund.
Frequently Asked Questions (FAQs) – Car Insurance
- Do I really need a motor insurance?
It is against the law, in Singapore, to drive a motor vehicle on the road without a valid insurance policy. The policy must provide coverage for personal injury to third parties. A motor insurance policy covers you against costs of you damaging someone else's property or any other loss or damage caused by an accident. Always remember to carry your Certificate of Insurance in your vehicle.
- What is No Discount Claim (NCD)?
Despite having your car insured, if no claim has been made under your policy for a year or more, you are entitled to a No-Claim Discount (NCD). Gaining a NCD reduces the premium for the following year. You can look at it as the insurer's way of rewarding you for having been a careful driver.
- When should I not renew my motor insurance with my current insurer?
If your current insurer is unable to offer you competitive rates, and you can save more money while enjoying a wider range of coverage from another insurer; it is time to renew your policy with a new insurance company.
- What are the types of motor insurances covers that I should buy to ensure complete protection of my car?
A standard car insurance policy offers three main types of covers. You can choose optional benefits to suit your individual needs.
The three types of standard motor insurance covers are Comprehensive Cover, Third Party, Fire and Theft Cover and Third Party Cover.
- What is the difference between Third Party, Fire and Theft Cover and Third Party Cover, in terms of motor insurance?
Third Party, Fire and Theft Cover not only covers injury and damage caused by your vehicle to someone else’s vehicle or property, but also protects your vehicle if it is damaged by fire or stolen.
Third Party Cover covers liability claims from third parties for damage and injury caused by your car to their vehicle/property.
- Why should I buy a Comprehensive Insurance Cover?
It is advisable to buy a Comprehensive Cover policy because it provides not only Third Party coverage, damage caused by you due to an accident (especially when you are at fault), but also from a wide range of dangers and threats.
News About Car Insurance
DirectAsia has launched new promotional offers to mark the beginning of Chinese New Year. These offers are valid on purchase of new car and bike insurance policies. Eligible individuals will get a chance to win shopping vouchers or a free bike inspection.
30th January 2018
The rise in ransomware insurance claims is being attributed to the increasing use of Bitcoin, the cryptocurrency for hackers who rip-off large amounts of sensitive information. However, purchasing Bitcoin has become a form of temporary protection, however dangerous, against attacks.
04th January 2018
CIMB Bank teamed up with Sompo PrivateCAR Insurance to give an additional 10% discount on your motor insurance. This offer is valid till 31 May 2018. The first 50 applicants for the policy every month will also get a customised NETS FlashPay Card.
26th December 2017
AIG Singapore has launched an online portal through which users can begin the process of submitting claims and potentially reduce the time they would have to spend at Accident Reporting Centers.
29th December 2017
DirectAsia launches #DontGetStuck campaign
DirectAsia has recently launched a new campaign called #DontGetStuck, which encourages Singaporeans to not select the auto renewal feature for their car insurance policies. This campaign has been created by MullenLowe Singapore. A research was done before the campaign and results showed that almost half of the drivers in Singapore have selected auto renewal facility for their policies without even comparing them with other deals. Through this campaign, DirectAsia allows customers to create Gifts and share them on social media. An ad featuring a sloth is also a part of this idea which symbolises the speed of the company’s competitors.
18th July 2016
Aviva and AIG Offer 2 Year Insurance Policies to Motorists
Vehicle owners in Singapore now have unusual option for taking an insurance policy on their vehicles. Instead of paying for a car insurance on an annual basis, you can now take a 2 year policy providing double the coverage period that has been extended to motorists by Aviva and AIG. AIG is Singapore’s 3rd best motor insurer and Aviva is one of the best online insurers on the island.
AIG offers its insurance package with a cover of 24 months with 24 hours coverage. The main benefit under this policy includes savings on your premiums and protection from claims loading. The one year premium on the policy is S$1,000, however a 2 year policy is just S$1,800 which is a 10% discount on the premium. This dual year insurance policy also provides a new for old replacement of your vehicle with complete cover in case of total loss of your vehicle in an event of an accident if your car is 24 months old and lesser. Additionally, the cover also includes complementary key replacement which otherwise costs S$800, plus a lock out reimbursement and break-in protection. It also comes with a free NCD protector from the 13th month until the end of the policy.
Aviva has also claimed that approximately 10% of its customers are now opting for a dual year insurance plan.
12th July 2016
NTUC Ride with Us Promotion
Runtime – This is an ongoing promotional offer. This will continue till August 31, 2016.
Particulars – Enjoy S$30 reward for renewing your motorcycle insurance with NTUC.
Terms and Conditions – Please, get in touch with NTUC to know more about the terms and conditions of this particular promotional offer.
Aviva and AIG offer 2 year insurance policies to motorists
Car owners can choose to avail a 2 year insurance policy instead of paying for car insurance on an annual basis. 2 year car insurance policy offers coverage for double the period. This kind of insurance policy is being provided by Aviva and AIG. AIG is the third largest motor insurer in Singapore. If you have to pay a premium of SGD 1,000 for an AIG policy, for a two year policy you will have to pay SGD 1800. So, you can save 10 percent on the premium payments.
25th May 2016
Car Insurance Premiums To Increase in 2016
A report released by BMI Research indicates that car insurance premiums will be hiked by the insurers in 2016. Despite the fact that the rate of car ownership is relatively low in Singapore, BMI Research believes that the insurers have tremendous pricing power and so they can opt to increase insurance premium rates in the country. The experts at BMI Research predicted that rates for car insurance premiums will increase by 5.2 percent in the current year and the total value of this insurance segment will likely increase to $1.3 billion. These experts further predicted that premiums will continue to rise in the coming years as well.
10th February 2016
Motor Insurance will Cover Damages Caused by Trees
Vehicle owners whose cars have suffered damages caused by falling branches or trees can now claim compensation from their insurance firms. Earlier such events were referred to as “acts of God” and were not covered as part of the insurance compensation. Mr Peh Chee Keong, the Vice President of Motor Insurance at NTUC Income has further corroborated this by claiming that their motor insurance covers any damage caused by fallen branches or trees.
A spokesperson for Aviva has also verified this and on behalf of the firm, said that all Aviva policyholders can claim compensation against their own policies when their vehicles have been damaged on account on fallen trees. The payout amount will depend on the extent of damage caused by the fallen trees or branches.
This is a direct result of many vehicles in Singapore who have suffered damages in the hands of fallen trees and branches. The trees in public spaces come under the purview of the National Parks Board (NParks). NParks, which is the Singapore Land Authority and Housing Board have been working since 2003 to identify and replace storm – vulnerable trees that are prone to uprooting. This week alone, the vehicles that were parked in the open air car park at the Pandan Valley condominium suffered significant damage after an old tree toppled over many of the vehicles parked. Between 2003 and 2013, 4 people have reportedly died and 62 injured as result of falling branches and trees.
05th January 2016