What type of car insurance do I need?

This article was updated on 17 August 2023.

Do you know anyone who owns a car without insurance? Of course not. Here’s why:

Car insurance is required by law in Singapore. The reality is that there are no two ways around it. There are several types of car insurance offered in Singapore and it’s good to know their differences so that you are able to make an informed decision.

What are the types of car insurance plans you can choose from?

Third-Party Only (TPO)

Basically, this ensures that you don’t burden anyone else except yourself. It’s literally basic but responsible at least.

The Third-Party Only (TPO) plan meets the minimum legal requirement to drive under Singapore law. In case of an at-fault accident, meaning you are responsible, the plan covers damages to the other person’s car – not yours. You’ll have to bear the costs of any repairs to your vehicle. Precisely because it is liability only, third-party plans offer the least protection and are often cheaper than other types of car insurance policies.

Third-Party, Fire, and Theft

Think of this one as an upgrade, costs more but covers more too.

A Third-Party, Fire, and Theft plan is essentially a compromise for those interested in having a plan with more coverage than a regular third-party plan, but less than comprehensive car insurance offerings. In case of an at-fault accident, it also just covers the damages to the other person’s car only. However, on the brighter side, you will be insured against fire and theft. It’s an ideal choice for cars with lower market value and experienced drivers.

Comprehensive Coverage

Coverage for third-party liabilities, theft, fire and more, including your own car repairs

A comprehensive coverage plan will cost more, but also offers the best financial protection for the other person’s car and yours too. Depending on your insurer, this plan covers most scenarios including third-party, fire, theft and even medical costs arising from accidents. It is also the most popular plan among drivers in Singapore who are still financing their cars.

Should you buy the Comprehensive, Third Party or Third Party Fire and Theft car insurance plan?

When deciding between the three plans, you may like to consider the trade-offs. Third-party car insurance is the most wallet-friendly option but provides the least amount of coverage, which is why people who get third-party car insurance typically drive an older car with lower market value.

Third-party fire and theft insurance offers more coverage by including financial protection for theft and damages to your car arising from fire. However, your car repairs resulting from accidents are not covered.

If you’re looking for a wider scope of coverage, then comprehensive car insurance might be more up your alley. It not only covers third-party liabilities but also protects your vehicle against damage, regardless of fault. With this policy, you can feel at ease knowing that repairs to your car will be taken care of, even if you are responsible for the accident. For drivers with brand new or high-value cars, comprehensive car insurance is the most prudent choice.

Costs of car insurance based on different factors

When it comes to car insurance, there are several factors that determine what your car insurance premium will be. These factors explain why you might be paying more or less premium than another driver.

Age, gender and marital status

Typically, younger may face higher premiums, as they are statistically more prone to accidents. Similarly, marital status can also impact your insurance cost, with married individuals often pay lower premiums due to perceived responsible behaviour. Car insurance for younger females tend to be lower compared to younger males.

Year of registration and model of car

Apart from who the driver is, the type of car you drive also affects the cost of car insurance. Insurers take into account the make, model, and age of your vehicle to assess its safety features, repair costs, and susceptibility to theft.

Car usage

Moreover, your car usage pattern significantly influences your insurance cost. If you primarily use your car for daily commuting or business purposes, your premiums may be higher compared to those who use their vehicles less frequently. Low annual mileage and limited use reduce the chances of accidents, thus leading to potentially lower premiums.

Driving experience

Seasoned drivers with a long driving history are perceived as more careful and responsible, making them less risky to insure. The more years you’ve spent behind the wheel, the better it looks to your insurer. Conversely, if you’re a new driver with limited on-the-road experience, or perhaps you’ve recently passed your driving test, be prepared for higher insurance costs. Nevertheless, the encouraging news is that maintaining a clean driving record over time can lead to a gradual reduction in those costs.

Claims history

Drivers with a clean claims history are often considered safer and more responsible on the road. As a result, they may be eligible for discounts and lower premiums. For example, FWD Car insurance offers lifetime 50% No Claims Discount (NCD). FWD is the only insurer that guarantees your Lifetime 50% NCD as long as you remain our customer. This means you get rewarded for safe driving.

What are the common additional benefits in car insurance?

Apart from the peace of mind and financial protection it offers, there are additional benefits that some plans offer that can be incredibly valuable during difficult situations.

Emergency assistance

Emergency assistance provides round-the-clock support when you find yourself in a bind. If your car breaks down or becomes unsafe to drive, certain car insurers will be able to provide you with the necessary support. They may dispatch a breakdown specialist to provide services like battery replacement, vehicle jumpstart, towing, topping up of petrol, and more, ensuring you get back on the road as smoothly as possible.

NCD protector

For an added layer of protection, you may consider an optional enhanced benefit called NCD protector. This feature safeguards a portion of your No Claims Discount (NCD) for ‘at fault’ claims.

For example, if you have a Comprehensive plan with FWD Car insurance and currently hold an NCD of 30% or 40%, you can opt for NCD Protector Enhanced Benefit. With this option, your NCD remains untouched as long as you don’t make two or more at-fault claims within a single policy year. It’s a great way to maintain your NCD status and keep your premiums in check.

Courtesy car

If your car is damaged beyond repair and you have a courtesy car benefit in your car insurance, you can get a temporary replacement car until your claim is settled or for a specified period, whichever comes earlier. The courtesy car ensures that you can stay mobile and carry on with your daily activities while your car is being repaired or replaced.

Claims concierge

When it comes to insurance, the claim experience is important. Dealing with a damaged or stolen car is already stressful and navigating a cumbersome claims process only adds to the burden. That’s why, when choosing car insurance, you may like to consider how the insurer enhances the claims experience.

For example, FWD Car insurance goes the extra mile by offering a claims concierge service to support you every step of the way. There is a single point of contact that takes care of all your claims-related needs, making the process hassle-free and stress-free for you. Whether it’s arranging a courtesy car, providing updates on your car repairs, or managing the necessary paperwork, the claims concierge has got it all covered.

FWD offers three comprehensive car plans covering vehicle repairs, medical, third-party damages, daily transport allowance, and roadside assistance. Determining which one you should get greatly depends on your needs, budget, the make and model of your car as well as driving history. Get a free car insurance quote from us.