Motor Insurance Consumer Guide

Frequently Asked Questions

1. What are the common features and exclusions of motor insurance?

Besides the fact that it is against the law in Singapore to drive a motor vehicle without a valid insurance policy to cover third party bodily injury, motor insurance makes good sense as it gives you protection against financial damages or losses that may arise from a motor accident.

It covers you for personal injury that you may cause to third parties, and can cover your costs if you damage someone else's property. It can also cover any other loss or damage that you may suffer in a motor accident.

A motor insurance policy typically imposes an excess which 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.


2. What are the motor insurance packages commonly available in the market? How do I select one that is suitable for me?

Insurers offer three main types of motor insurance policies.

The key features of the policies are as follows:

Third Party
  • Death or injury to other parties
  • Damage to other parties' property
Third Party, Fire and Theft
  • Death or injury to other parties
  • Damage to other parties' property
  • Fire damage to, or theft of, your vehicle
  • Death or injury to other parties
  • Damage to other parties' property
  • Fire damage to, or theft of, your vehicle
  • Accidental damage to your vehicle
  • Windscreen damage
  • Damage arising from riot, strike and civil commotion
  • Personal accident cover (private car only)
  • Medical expenses (private car only)
Optional benefits for comprehensive policies
(may be subject to payment of additional premium)
  • Damage arising from flood and windstorm
  • Liability of passengers for acts of negligence
  • Personal accident benefits for passengers
  • Additional excess
  • No-Claim Discount protection (private car only)

Optional benefits are available to meet your individual needs. Do note that optional benefits for comprehensive policies may be subject to payment of additional premium.

By law, you are required to have a motor insurance policy that provides cover for personal injury to other parties. To find the policy that suits your needs, shop around and compare products that may offer your preferred combination of price, excess and requirements in terms of use and repairs.


3. What are the pointers to take note before buying a motor insurance policy?

As a customer, you need to keep in mind that not all motor insurance policies are the same. Insurers offer a wide variety of products to meet the individual needs of customers. Again, it is best to shop around to find a policy with your preferred combination of price, excess and requirements in terms of use and repairs.

Remember that if the premiums are lower, there may be more restrictions that may apply to what is covered, and your options in the event of a claim.

For example, lower-priced policies may come with restrictions such as on who is the main driver of your car or whether your car can only be driven by named drivers; where you can send your vehicle for repairs; or whether new or reconditioned parts are used. Higher priced policies usually cover all your authorised drivers who have a valid driving licence, and may allow more flexibility in your choice of repairers, etc.

Policyholders should refer to the Certificate of Insurance which clearly states who is authorised to drive the vehicles.

Please note that different excess may be applicable when your authorised drivers are involved in an accident. Please check with your insurer on the applicable excess.

Take note of these points when considering whether to buy a certain 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 a hire purchase or 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 damaged vehicle only to those authorised workshops listed in your policy for repairs?
  • Does it have restrictions on who is permitted to repair the vehicle?
  • Will reconditioned parts be used for repairs?


4. What information will the insurer highlight to me with regard to purchasing motor insurance?

  • The premium payable
  • The excess (for insured and other drivers - named and unnamed)
  • The risks or events covered and period of coverage
  • Restriction on drivers (if any)
  • Restriction on where repairs could be done
  • Non-standard exclusions
  • Special accident reporting and claims procedures
  • The insurer's cancellation and refund policy

GIA recommends that your insurer provides an executive summary of key contract terms and obligations with your policy. Please make a point of requesting this if your insurer has not provided it. It is important to read your policy as soon as you receive it. This way, you can be sure that there will be no surprises should you need to make a claim.


5. What information is required from the policyholder to the insurer?

The insurer needs to know some basic information about you. This is to assist the insurer to better assess the underwriting risk so that proper premiums can be set.

It is important to answer these questions truthfully. Failure to do so may result in your policy being void and your insurer may repudiate any claims against the policy. The following are some frequently asked questions:

  • Have you made any recent claims?
  • Have you had any recent motor accidents?
  • Have you ever received a Traffic Summons or been charged for a driving offence?
  • Has your vehicle been modified?
  • What will the vehicle be used for?
  • How long have you been driving?
  • Who will be driving the vehicle?
  • Do you have any medical conditions or disabilities that may affect your driving?

Please clarify with your insurer, agent or broker should you have any doubts in answering any questions.


6. How is my premium priced?

Most insurers in Singapore adopt a "risk factor rating system" when setting your premium. This means that the premium is based on factors other than the vehicle's value or the price you paid for it.

In general, the following risk factors are considered when setting your premium:

  • Vehicle Profile
  • Insured/Driver(s) Profile
  • What the vehicle will be used for (private use/corporate use/commercial use/hire etc)
  • Type of cover
  • Claims history

Insurers may also charge a higher premium when there is an impending claim against you but you could request for a possible refund if it is concluded that you are not liable for the impending claim.

These risk factors will not necessarily have an equal influence on the size of your premium. Your insurer will give each risk factor a weighting based on its range of statistics and past claims information.

You may be entitled to a discount on your premium with a No- Claim Discount (NCD). Please refer to section on NCD to find out more.



7. Can my premiums increase even though I did not make any claim against my policy?

Yes, it is possible. Your claims history is not the only factor your insurer looks at in setting your premium. All insurance, including motor insurance, is about pooling of risks. As such, a pool with high claims experience will have higher premiums. Inflation in labour and material costs could also result in higher claims costs. There are also other risk factors that insurers have to consider in their pricing models in setting your premiums, as explained in question 6.

There are more than 25 motor insurers in Singapore, each with their own pricing models. You are encouraged to shop around for a suitable policy based on your needs.


8. 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 written notice to the other party. If you or 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 such as when a claim has been made, subject to the terms and conditions of the policy. Please check with your insurer before committing to the policy.


9. Can my insurer cancel my policy or refuse renewal of my policy?

Yes. Your insurer may decide to cancel your policy if you breach any terms and conditions, or provided false information on the insured/driver profile, your claims history, vehicle profile, etc. Your insurer may refuse renewal due to poor claims history in relation to vehicle and/or insured driver profile.

Please check with your insurer on the notice period in relation to the cancellation of your policy.