Like in other countries, car insurance in Singapore is mandatory. Car insurance is a requisite when you opt to purchase a car. It can be extremely confusing to first-time car insurance buyers when dealers start throwing terminologies they are unconversant with, like co-insurance, no claim bonus, and so on. To better understand the world of car insurance, this article discusses what it entails for the benefit of car buyers.
Types of Car Insurance
Car insurance is categorized into three plans: Third Party Only (TPO), Third Party, Fire and Theft, and Comprehensive Coverage. Drivers in Singapore can choose any of the three plans.
So, let’s dive into each of the plans to help you determine the best plan for you and how it may suit your needs.
- Third-Party Only (TPO) Plan
This plan affords drivers the essential car insurance coverage. TPO is liability coverage that only covers damage caused to third-parties like knocking a guard rail or injuring a pedestrian. However, compensation is only made after ascertainment that it was your fault.
It’s worth noting that the plan does not protect you and your car; it only protects third parties. Under TPO, you won’t receive any compensation from the insurer.
Should you go for TPO car insurance?
According to Singapore laws, a TPO insurance coverage plan is the least you can have to be permitted to operate a car. Circumstances under which TPO would be ideal for you.
- If you rarely use your car.
- If taking huge financial risks is not a concern to you.
- If losing your car to an accident won’t impact your life negatively.
- If your car is overused and you’re planning to sale, it sooner rather than later, so it would be unnecessary to get additional coverage from TPFT and Comprehensive car insurance policies.
- If you only require basic protection for liability against damage caused to third parties.
- Third-Party Fire and Theft (TPFT) Plan
In addition to covering liabilities, TPFT car insurance protects against loss or damage resulting from fire or theft. However, loss or damage resulting from other factors indirectly related to this plan are not covered.
Should you go for TPFT car insurance?
TPFT is pretty expensive than TPO due to more coverage. You should go for TPFT if you’re prepared to incur additional cost and:
- You don’t want to finance entire car expenses out-of-pocket in case of an accident.
- You’re prepared to take some financial risk by paying for minor damages out-of-pocket.
- Your vehicle is exhausted, does require more than liabilities coverage but not a comprehensive plan.
- Comprehensive Plan
Comprehensive insurance incorporates the perks of TPO, TPFT, and accidental damage to the vehicle, whether self-imposed or caused by natural calamities.
Aside from rendering personal accident perks, it also covers medical costs for the commuters on-board.
Should you go for comprehensive car insurance?
Comprehensive insurance is more expensive than TPO, TPFT because of its extensive coverage. Only go for comprehensive insurance if you’re willing to pay more and:
- Your vehicle is brand new, pricey, and an opulence car that will incur more repair.
- You’re a novice driver and more likely to cause accidents.
- Your car is always on the roads and would demand a replacement if it is sent for repair.
- You’re reluctant to take huge financial risks because you only need to pay a small proportion for damages and leave the rest to the insurers.
So, the plan that suits you the best will depend mainly on your vehicle’s needs, type, and state.