If you have invested your hard-earned money to purchase a car, you will also have to purchase an insurance policy not just because it is mandatory to drive in Singapore, but also to cover for damages in case of accidents. In the context of Singapore, you must at least have a third-party insurance to drive on the road legally.
If you buy a new car, most insurers will insist on you purchasing a comprehensive coverage that will protect you from virtually anything that occurs to you and your car in case of a mishap. However, if you have purchased a used car and do not require all the fancy coverage, you can opt for third-party coverage. With third-party car insurance, you will get coverage only when your car is driven within the Republic of Singapore, West Malaysia and Southern Thailand and when it is being shipped by sea between any of these regions.
Most third-party policies are offered on the basis that you agree to abide by the following:
- Inform the insurer if there are any changes to your car that may potentially damage your ability to drive legally and safely. The insurer may modify the terms and conditions of the policy or alter the premium amount.
- Inform the insurer if you do not have a financial interest in your car or you do not own your car.
- Act in accordance with with the appropriate laws and requirements when driving in Singapore and every other place where you’re promised protection.
- Keep your car and all its spare parts and accessories in a drivable condition and take good care to protect them from damage.
If you have purchased your car under a financing contract, the insurer is likely to settle a claim by making the payment to you as per the financing contract. If there is any mismatch between the terms in the financing contract and the insurer’s terms and conditions as mentioned in the policy, the insurer will follow their policy terms.
Features and benefits of third-party car insurance plan
You will get the following benefits if your car is involved in an accident, or if it breaks down, or is lost or stolen during the period of coverage with a third-party insurance plan:
Third party liability
In case the insurer is lawfully responsible for a claim as per “Third Party Liability” benefit, the insurer will spend up to S$3,000 and arrange for the legal representation to defend the insured in any investigation or official probe. The insurer will also handle all legal costs, in case you appoint your own lawyer to defend yourself or the sanctioned driver. However, the insurer will not pay for the expenses incurred to defend any charges of dangerous driving, reckless driving, and causing death by dangerous driving, or murder.
As part of third-party liability, the insurer will cover you against legal responsibilities as a result of your actions when driving, that leads to either death of or injury to a third party or loss of or damage to a third party’s possessions. The coverage you will get will be up to S$5 million irrespective of the number of claims resulting from it. You will also get this benefit when you drive another private car registered in Singapore if you have the owner’s consent to drive. This extended benefit will however apply only to you and not any other driver. However, this benefit will not cover for any damages to you, your property or your family members.
In case your car is dangerous to drive or breaks down within the covered region, you or the sanctioned driver can call the insurer’s 24-hour Emergency Assistance hotline number. The insurer’s emergency assistance team will aid you on what you must do next. Your car will either be repaired at the accident site or will be towed to a workshop as per its condition.
What does a third-party car insurance policy cover?
Most car insurance providers offer coverage for the following as part of the third-party policy:
- Protection while driving in Singapore, parts of Thailand and West Malaysia.
- Legal costs of up to S$3,000, if you are prosecuted for damages caused by your car.
- Cover of up to S$5 million for accidental harm to somebody’s belongings caused by your car.
- Roadside assistance any time of the day in Singapore, parts of Thailand and West Malaysia.
- Any person you have put faith in to drive your car.
- Infinite cover if you are legitimately responsible for somebody’s injury or death caused by your car.
There are various scenarios under which most third-party insurance does not provide protection. Let us take a look at some of these scenarios:
- Most insurers will not cover for any damage caused if the number of people seated in the car exceeds the allowed number.
- You will also not get any coverage, if the car was used for commercial purposes during an accident.
- You will not get coverage if you drive another person’s car.
- If your car is used for something other than what is mentioned on the Certificate of Insurance, then you won’t be able to make a claim.
- If you deliberately tried to cause self-injury, or attempt or commit suicide, then you can’t make a claim.
- You cannot get policy benefits if you were driving under the influence of alcohol.
- If your car is not in a drivable condition, or is altered without authorisation from the Land Transport Authority, then the insurer will not compensate your loss.
- If the loss or damage caused is a result of man-made or natural disasters such as earthquakes, floods, strikes, or riots, then you will not be insured.
How to make a claim
No insurer will do anything on your behalf to file a third party claim. So, you must lodge a damage claim in case of an accident under your own policy. Your insurer will begin retrieval against the insurance provider of the other driver if it is proved that the other driver is entirely responsible for the accident.
You will not lose any No Claim Discount at the time you renew your next insurance if retrieval is successful. If a third party approaches you, instantly inform your insurer and send them all the documents you received from the third party. The rest will be handled by your insurer. If your insurer is notified by a third party, they will keep you up-to-date at every point until the claim is settled.
Most companies do not offer mediation services between customers and member companies. Claimants are expected to approach the insurer concerned straightaway, or reach out to the Financial Industry Disputes Resolution Centre Ltd.
In most cases, third-party damage claims are resolved in six months. If there are complications involved, insurers will require more time for inquiries.
You can contribute in speeding up the claims process by giving the following information to your insurance provider:
- Information about the scene of accident, including pictures, videos and other evidence.
- Accident report and Police report.
- Other documents supporting your claim.
You may get in touch with your insurer if you want to know the position of your claim. If the processing time goes beyond the normal period, it is possible that the company is studying the case in detail before making a decision on your claim.
Third-party policy renewal
With most car insurance companies, you will have to renew the policy before the last day of your policy expiry date. You can renew the policy by logging in to the respective company’s website and filling in the pertinent details. Many car insurers will provide you a concession on the premium at the time of renewal, if you have a history of making zero claims.
How to cancel your third-party car insurance
You can terminate your third-party policy any time by giving your car insurer a notice of seven to 30 days. Your insurer will repay a major portion of the premium for the outstanding period of your insurance term. You may have to pay any remaining amount you owe and your insurer can reduce the refund if the sum you owe is not paid back in time. You can call your insurer’s hotline number for any emergency assistance.
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Frequently Asked Questions
Q. What is covered in third-party car insurance?
A. With just the third-party coverage, you are protected against damage to other parties’ property and death or injury to other parties.
Q. Do I have to pay a higher premium when the market value of the vehicle is going down?
A. A vehicle’s market value is not connected any way to the risks involved. Market value of the vehicle has no influence on the claims received from third parties for injuries and property damage.
Q. In some cases, there are terms like ‘excess: S$300’ in the third party insurance policy. What does this mean?
A. If there is an excess, it means when any third party claim is made, you have to pay this excess on your own. For example, in case of a third party claim, you will have to pay S$300 while the insurer would pay S$7,700 for a claim of S$8,000.
Q. In case of third-party insurance cover will I get any discount if I do not have any demerit points in my name?
A. Yes, most companies will give you a safe driver discount if you have no demerit-points.
Q. How can I renew my road tax?
A. You can renew your road tax via AXS machine, online banking and Singapore Post Office.