Basic Guide to Car Insurance

Ford car that got into an accident

Car insurance is designed to protect you, your family and your vehicle when your car is damaged or if you are involved in an accident on the road. The coverage also protects your assets when you are found responsible for causing the accident.

Car insurance can come with a hefty price tag. However, do not make the mistake of opting out just to save the extra money. This mistake may cost you more when you end up in a car crash or have damage to your vehicle that you are not responsible for.

Although car insurance sounds complicated, it is mostly comprised of three different policies. Read on to understand more about the differences and whom they are for.

 

1. Third-Party Only (TPO)

Third-party car insurance, also commonly known as ‘third-party only’ (TPO) car insurance in Singapore, provides you with the minimum legal requirement to drive, and it is also the cheapest car insurance available. 

TPO provides coverage for others when you cause damage to their vehicle, but you would have to pay for your own damages. TPO is paid only when your fault has been proven. This gives you cover if someone else claims against you in the event you cause an accident or any damage when driving.

2. Third-Party, Fire and Theft

Third Party, Fire and Theft car insurance covers for legal liability to the third party as well as damage to your own car as a result of fire or theft only. 

The Third Party, Fire and Theft car insurance plan is a good in-between plan for those who don’t want the full benefits of comprehensive car insurance, but still want to be covered against incidences of fire and theft.

3. Comprehensive

Comprehensive car insurance provides the broadest coverage among the three, and is also the most commonly chosen option in Singapore. The comprehensive car insurance covers yourself and other parties for death or injury, medical costs coming from the accident, damage to property and other accidents like fire and theft.

The Comprehensive Coverage is required by the vast majority of banks for the approval of car loans. Hence, if you are seeking to apply for a car loan for the banks, you are most likely to apply for comprehensive car insurance. 

 

Additional Coverage

You can also opt for additional coverage by paying a slightly higher price. These coverage includes windscreen damage, damage arising from riot, strike and civil commotion, damage arising from flood and windstorm, liability of passengers for acts of negligence, personal accident benefits for passengers and no-claim discount protection.

 

Total Costs 

Car insurance is pricey and they are mandatory, making them an unavoidable yet hefty cost. The price could range from S$700 to S$1,000, or even more for a year’s coverage. 

Car insurance premium is calculated on a case-by-case status. Some factors that could contribute to your annual premium include age, gender, marital status, occupation, driving experience, age of car, car usage and many more.

Get quotes from several car insurers to pick the best price for your profile and car. However, do ensure that you are sufficiently covered and you have avoided horrible terms and conditions. 

Choose the type that suits your needs, desires and wallet best. To view the best car insurances in Singapore, click here.

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