Private Motor Insurance

Motor Insurance is purchased for cars, trucks, motorcycles, and other road vehicles.
Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.

Type of Motor Insurance

In Singapore, there are mainly 3 types of cover namely :

Comprehensive

This covers accidental loss or damages to the insured vehicle and legal liability for third party injury or property damage. It is the most costly and optional benefits are available for additional coverage.

Third Party, Fire and Theft

This covers loss or damage to the insured vehicle caused by fire or theft only and also legal liability for third party injury or property damage.

Third Party Only

This indemnifies only the insured’s legal liability for any third party injury or property damage. It is the cheapest  type of  motor insurance.

However, if your vehicle is still under finance, the financing company would require you to take a comprehensive coverage on your own vehicle.

Premium of Motor Insurance

Premium of motor insurance is calculated based on 2 category, Vehicle’s Risk & Motorist’s Risk

Motorist’s Risk

  • Age of Driver
  • Driving Experience
  • Gender (Some insurer deems female as safer drivers)
  • Marital Status (Some insurer deems married people as safer drivers)
  • Accidnet Record in last 3 years
  • Occupation
  • NCD Accmulated

Vehicle’s Risk

  • Make & Model
  • Engine CC
  • Type of Coverage (Comprehensive/TPFT/TPO)
  • Age of Vehicle

No Claim Discount (NCD)

No claim discount is a financial incentive for the insured for not having to make a any claims under you policy either by yourself or by a third party for a period of 12 months between each successive renewal of the policy. The following table shows how the NCD is awarded by all insurers across the industry. 

NCD Accumulation Table
Private Car Policies
with no claims
1 Year 10%
2 Year 20%
3 Year 30%
4 Year 40%
5 Year & More 50%

If a claim is made during the policy year whilst the insured is enjoying a NCD, the NCD will be reduced at the next renewal of the policy, as follows :

NCD Claim Table
NCD at time of claim No of claim during period of insurance On renewal NCD reduced to
50% 1 20%
40% 1 10%
30% 1 Nil
50% or less 2 Nil

 

NO CLAIM DISCOUNT (NCD) PROTECTOR

NCD Protector protects private car owners’ NCDs. It allows motorists to make claims on their own insurance policies without losing their entitlement to their NCDs should they make a claim under the policy. NCD Protector extension is only available to motorists already entitled to 50% NCDs. The NCD Protector policy extension offers the following protection:

NCD Protector Claim
No of claims during the period of insurance NCD entitlement on renewal of policy
1 50%(instead of 20%)
2 20%(instead of Nil)
3 0%

 

If I make a claim, will I automatically lose my NCD?

Not necessarily.

All insurers in Singapore use a guide called the Barometer of Liability Agreement (BOLA) to determine how much each party is liable in an accident.

The BOLA is designed to speed up claims processing. It does not diminish your right to contest liability under the law.

Under the BOLA, your NCD will not be affected if your liability is 20% or less in an accident involving an identified vehicle. In all other cases, your NCD may be affected.

Does my NCD apply to me, or to my vehicle?

In principle, your NCD applies to you and not to your vehicle. For example, if you sell your vehicle and buy another one, you will retain your NCD. However, if you own more than one vehicle, you might have a different NCD for each vehicle. You should check the details with your insurer, but generally:

Your NCD can:
Be transferred to another vehicle you own, but it cannot be applied to more than one vehicle at any point in time. For example, if you have accumulated a 30% NCD while using one vehicle, it does not follow that the same NCD applies to any other vehicle that you own or decide to buy. In other words, you will have to earn the NCD for each vehicle separately.

Your NCD cannot:
Be transferred to another person.

Can I insure against the loss of my NCD?

If you have accumulated a 50% NCD (five years or longer without a claim), some insurers may allow you to buy protection against the loss of the discount.

By paying a small amount of extra premium, you can make one claim during the year, and still have the discount fully protected. The 50% NCD is protected as follows:

NCD Protector Claim
No of claims during the period of insurance NCD entitlement on renewal of policy
1 50%(instead of 20%)
2 20%(instead of Nil)
3 0%

*check with your insurer whether NCD protection cover is available.

Will I lose my NCD if there is a break in ownership of my vehicle?

Most insurers in Singapore will allow you to keep your NCD should there be a break in ownership for up to 24 months. Some insurers set the timeframe at 12 months. You should contact your insurer for details.

Do I get a refund if I cancel my policy?

The common practice is that both you and your insurer can cancel your policy for any reason by giving seven days of written notice to the other party.

If your insurer cancels the policy, it will refund you the unused proportion of the premium.

Some insurers refund the premium on a pro-rata basis with the deduction of a small administration fee. Others use a method that calculates what would have been charged if your policy were a short-term policy. This usually applies if the cancellation is at your request. Please check with your insurer how this is calculated.

Note that refunds might be subject to a minimum amount, and that your insurer might reserve the right not to refund any premium if a claim has been made on the policy.

Always check carefully and understand what is covered before you take up a policy.

[info_box title=”How can safe driving save me even more money?” color=”red” type=”description” icon=”warning”]If you have not violated any traffic rules for three consecutive years, you are entitled to a Certificate of Merit from the Singapore Traffic Police.Should your NCD be 30% and above for a private car policy or 20% for a privately owned commercial vehicle policy, some insurers may reward you with a further 5% discount upon presentation of your Certificate of Merit.For details, please click here to check if you are entitled to a Cerificate if Merit (COM)[/info_box]

BUYING A MOTOR INSURANCE POLICY – THINGS TO CONSIDER

Not all motor insurance policies are the same. To meet the individual needs of customers, insurers offer a wide variety of products. By shopping around, you will have the best chance of finding a policy with your preferred combination of price, excess and requirements relating to use and repairs.

As a general rule, the lower the premium, the more restrictions may apply to what is covered, how much you would be paid in the event of a claim, and what your options may be in the event of a claim. For instance, low-priced policies might come with restrictions as to where you can send your vehicle for repair or whether new or reconditioned parts are used. More expensive policies may allow more flexibility in your choice of repairers, etc.

The following are important things to consider when buying a motor insurance policy:

  • Are there restrictions on who can drive the vehicle?
  • What extra cover can you buy?
  • Does the policy meet the requirements of your bank or finance company if you are buying the vehicle on hire purchase or a car loan scheme?
  • How much excess will you be required to pay should you need to make a claim?
  • Does the policy require you to take your vehicle to an Independent Damage Assessment Centre (Idac) for damage assessment?
  • Does the policy have restrictions on who is permitted to repair the vehicle?
  • Will reconditioned parts be used for repairs?

What is an excess, and how does it work?

An excess is the cost you may be required to bear in the event of a claim being made against your policy. Generally, the more risk the insurer carries the higher the excess will be.

Why is it a good idea to tell my insurer who will be using the vehicle?

Declaring the names of the people who will be regularly driving your vehicle allows your insurer to assess the risk profile accurately and set the appropriate premium and excess.

You are required to fully disclose information that may have a bearing on your policy cover. If your vehicle is damaged while being driven by a person not named in your policy, the insurer may apply a higher excess due to the unknown risk covered.

If the vehicle is damaged while being driven by a young or inexperienced driver not named in the policy, you may be charged a higher additional excess because the driver represents a higher degree of risk. The definition of young and inexperienced driver varies from insurer to insurer. Please check the definition in your policy.

For some vehicles, such as high-performance cars, your insurer may specify that coverage will only apply to drivers named in the policy, i.e. authorized drivers.

Will my insurer cover me if I teach a provisional driving licence holder how to drive in my vehicle?

No, your motor insurance policy will not cover you. Only a certified driving school can teach a provisional driving licence holder how to drive a vehicle.

Can I choose who repairs my vehicle?

Your insurer may impose some restrictions on who can repair your vehicle. As part of an ongoing effort to control claims costs, some insurers use the tender bidding system or authorized workshops in making arrangements for repairs. Cost savings will benefit customers by keeping premiums competitive.

More expensive policies may allow you to go to the repairer or dealership of your choice. Your insurer is encouraged to disclose any restrictions on repairs before you buy the policy.

Dealer workshops
The warranty on new or relatively new vehicles will often state that the vehicle has to be repaired by the dealer or appointed agent of the manufacturer. If this is the case with your vehicle, you should check with the authorized motor dealer, agent or distributor on the terms and conditions of your warranty as repairs by other workshops may affect this.

Authorized workshops
Some insurers limit your choice of repairer to a panel of authorized workshops which does not always include authorized dealerships. Upon completion of repairs, a six-month warranty is usually given.

What is tender bidding?

In order to obtain cost-effective repair for your vehicle, some insurers use the tender bidding system. Insurers will invite selected workshops to provide quotes for the repairs to your vehicle and will award the job to a competitive bidder. Insurers adopting this system offer assurance that there will be no compromise on the quality of repairs. A post-repair survey may be conducted on the vehicle before it is returned to you.

Insurers adopting the system of authorized workshops and tender bidding seek to control claims costs without compromising quality. Such cost savings benefit customers in the form of competitive premiums.

Will my vehicle be repaired with new or reconditioned parts?

The aim of most policies is to have your vehicle restored to a condition similar to the one it was in before the accident.

Based on this principle, for a relatively new vehicle, damaged items will usually be replaced with new parts, which are either genuine or OEM (Original Equipment Manufacturer) parts.

However, for vehicles more than three years old, the insurer might opt to use good-quality reconditioned parts. Such parts are carefully checked to ensure they do not compromise the safety or road worthiness of the vehicle. A six-month warranty for repairs is usually provided by the workshop.

Your insurer will be happy to clarify its policy on replacement parts.

Should I insure my vehicle with or without COE and PARF?

The market value of the vehicle includes the certificate-of-entitlement (COE) and preferential additional registration fee (PARF) component. If your vehicle is bought using hire purchase or a car loan scheme, the bank or finance company may require you to insure the vehicle at its open market value (OMV), including its COE and PARF. If you own the vehicle, it is your choice.

Under current Land Transport Authority (LTA) regulations, a person may encash the un-used and valid PARF/COE rebate(s) if he/she does not intend to use the rebates to offset either the upfront taxes payable at registration of a vehicle or the Prevailing Quota Premium (PQP) (for COE rebates only) to renew the COE of his/her existing vehicle.

FAQs On Vehicle Modifications 

I wish to make modifications to my vehicle to enhance its performance. What must I do?

You must inform your insurer if you make any modifications to your car.

Why must I still inform my insurer and get his consent, even if LTA has agreed?

Many insurers consider modifications made to a car as material information in deciding what premium to charge for a policy; some insurers also do not wish to insure modified cars.

What is considered 'modification?' Does it affect both big and small changes to my vehicle? For example, I want to switch my wheel to sports rims. Does this apply? What about changing the in-vehicle radio to a multi-DVD entertainment system? Does this apply?

Modification refers to changes made to a car which are directly related to how it operates as a car. This includes changes to engine performance, drive train, air intake systems, exhaust systems, transmission systems, or any changes to the handling characteristics of the car including suspension systems, strut towerbars, or bracing as well as any changes made to the control unit of such parts. This list is not exhaustive.Routine maintenance where like-for-like parts are used, that is in accordance with the manufacturer’s standard specifications, will not be considered as modification.Accessories are parts of your car which are not directly related to how your car operates and will not impact your insurance coverage. This include upholstery, audio equipment, multi media equipment, communication equipment, personal computers, satellite navigation and radar detection systems, provided they are permanently fitted to the car and have no independent power source. Changes made to rims/tyres and body kits are not considered a modification when they are within the manufacturer’s defined and acceptable specifications. However please note that in case of any damage during an accident, insurers will only replace or repair with suitable part(s) in accordance with the manufacturer’s standard specification. If you require further clarification, please contact your insurer.

How do modifications impact on my annual motor insurance premiums? Will or do I have to pay more for my motor insurance because of these modifications?

This depends entirely on your insurer. Some charge additional premiums and some do not. We recommend in all instances where you think your car is modified that you advise your insurer or prospective insurer of what changes have been done to your car.

pdf Modification Allowed by LTA – Click Here to View

pdf Modification That Requires Approval by LTA – Click Here to View

pdf Modification Not Allowed by LTA – Click Here to View