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.
Insurers offer three main types of motor insurance policies.
The key features of the policies are as follows:
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.
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:
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.
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:
Please clarify with your insurer, agent or broker should you have any doubts in answering any questions.
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:
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.
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.
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.
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.