A motor insurance policy in Singapore is just as important as the car itself, other than being a mandatory aspect when you own a car. If anything goes wrong, accidents can often lead to higher costs than expected and a motor insurance can help you out of a motor blunder, but there are certain factors you should take into account when it comes to the best car insurance practices in Singapore.
1. There are three types of coverage
When it comes to acquiring a motor insurance in Singapore, there are three different types of options to choose from; namely, the Third-Party Only (TPO) policy, the Third Party Fire & Theft policy (TPFT) and Comprehensive policy.
It is legally compulsory for drivers to at least opt for a TPO car insurance policy in Singapore under the Road and Safety Act. It's the most basic of car insurance policies - covering costs that are normally associated with damaging someone’s car as well as possible medical expenses incurred by the other party. As a basic insurance policy, it's also the cheapest one available.
Secondly, the TPFT insurance policy acts as a middle-tier plan which offers extended coverage. The fire and theft in the name of the policy indicates the coverage of losses due to accidental fires or deliberate theft. This is a good option if you are worried about potential crimes or if you think that your car might be exposed to a fire hazard.
Finally, in comparison, comprehensive car insurance is the most well-rounded plan. It covers all general potential issues from third-party coverage, fire and theft liabilities, extending to losses and damages sustained by passengers, the vehicle, any belongings involved and the driver himself. The premium for a Comprehensive policy is also the highest out of the three.
2. Check your motor insurance annual premium
Each insurance provider provides differing motor insurance premium rates (for the same type of vehicle). Additionally, the calculation of a motor insurance premium is based on a risk factor rating system. This system determines how probable an individual is to become involved in an accident, depending on multiple factors such as age, gender, occupation and driving experience.
This only means that your premium will be higher if you are deemed to be a higher risk driver. For instance, the motor insurance premium will be higher for a salesperson whose job is highly dependent on travelling around in a car compared to an executive who only drives to and fro work, given that all other factors are similar.
Nevertheless, car owners also need to be careful of low-cost premiums. It's possible that some insurance companies deliberately incorporate hidden fees in order to stay on the same level as competitors in terms of rates. They snap unsuspecting buyers and earn more than initially expected in this process. This could be in terms of a higher excess, hidden clause about vehicle modification or a shortchange in certain benefits.
3. Take 'Excess' into account
In insurance terms, excess is what you have to pay if you get into a collision and you want to claim for the entire cost of repair. In most instances, you don't get out of paying anything. In fact, the excess fee acts as a reminder to not let drivers get too confident on the road and end up driving recklessly. Just because you're insured, it doesn't mean that you won't be paying something in the end. The amount of the excess is inversely proportional to the premium of your policy - this means that if you pay less on premiums you typically pay more for the excess in case of an accident, and vice versa.
4. Coverage extending across the Causeway
Many Singaporean and Malaysian commuters often cross back and forth the causeway for work, leisure or to visit relatives. In this case, it's important to consider selecting a motor insurance policy that offers roadside assistance and coverage beyond Singapore. Some policies cover Malaysia and even Thailand in rare cases. However, it's important to note that these plans are not part and parcel of basic packages. Instead, buyers may have to top up or add on this policy upon request. Either way, it's a good idea to ask your insurance company if they cover protection beyond Singapore borders.
5. Ask the right questions
When purchasing a motor insurance policy, it's your responsibility to ask the right types of questions. Insurance agents or representatives may not explain all the details at once, so it's crucial that you ask more things about the policy.
What exactly does the policy cover and what does it not cover? Find out what the insurance plan excludes and if there are any unmentioned details. For instance, some plans don't cover loss or damage if it's proven there was a failure to lock or secure the vehicle beforehand. Similarly, some insurers may not allow certain modifications or additions to vehicles, so it's best you fully disclose any modifications, be it for aesthetic or functional purpose, or any repairs that have been made.
There's also the possibility of courtesy or replacement cars, which some insurance companies offer as a substitute for customer cars that were too damaged beyond repair or cars that are being repaired temporarily. If your vehicle is not too badly damaged and is undergoing repairs, a courtesy car might be sent over for you to drive as long as your car is still in the workshop.
On the other hand, some companies offer brand new replacement cars within a specific time frame for vehicles that were too damaged to repair. If no car is issued as part of the policy, companies might offer a stipend to help cover daily costs of transportation until you receive your vehicle again.
Be sure to discuss these with an agent before opting for a suitable motor insurance.
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