Third-party car insurance, commonly known as ‘third-party only’ (TPO) car insurance in Singapore, provides you with the minimum legal requirement to drive. It gives you cover if someone else claims against you in the event you cause an accident or any damage when driving.
Use this guide to find out what you need to know about third-party only car insurance.
Motor insurance is mandatory in Singapore
When you’re purchasing motor insurance in Singapore, you have three levels of cover to choose from: Third Party Only (TPO), Third Party Fire & Theft (TPFT) and Comprehensive Insurance. Under Singapore’s Road and Safety Act, you need to have at least a TPO car insurance policy to register your vehicle. Also, your motor insurance must cover the entire road tax renewal period before you can renew your road tax.
The main reason governments impose mandatory car insurance is for the protection of the drivers’ liabilities. These liabilities may be anything from a pedestrian you hit, to a road sign that you crashed into.
According to the Motor Vehicles (Third-Party Risks and Compensation) Act, you can be fined up to $1,000, jailed up to three months, or both if you’re found driving without motor insurance. In addition, you’ll also be disqualified from holding or obtaining a driving license for 12 months from the date you are convicted.
Who offers TPO insurance?
The table below is the complete list of motor insurance providers in Singapore, based on One.Motoring website. Do note that some insurance companies do not offer TPO insurance.
Offers TPO cover?
AIG Asia Pacific Insurance
Allied World Assurance
Budget Direct Insurance
China Taiping Insurance
Direct Asia Insurance
EQ Insurance Company
MS First Capital Insurance
Great American Insurance Company
Great Eastern General Insurance
India International Insurance
Tokio Marine Insurance
United Overseas Insurance
Finder does not provide the products and services listed on its website (including insurance policies) to users. We do not assume any risk or undertake any liability under any insurance policies that we may provide information on.
There is no insurance agency relationship created between Finder and the user. We do not negotiate, service or effect insurance contracts on your behalf or on behalf of the insurer or insurance broker. We do not act as your agent.
How do I find the best TPO?
There’s no universally best TPO policy out there unfortunately, as it depends on a bunch of factors like your gender, age, and driving experience. But on the plus side, there are only two real differentiating factors between TPO policies: their price, and if they offer legal cost and expenses cover.
Legal cost and expenses cover. Besides the repair costs, claim costs could also include legal fees, loss of use and third party survey fees. Although most TPO plans only insure third party injury or property damage, some also include legal cost and expenses cover up to a certain amount (e.g $2,000 to $5,000).
Price. TPO insurance prices will vary as car insurance providers try to offer competitive rates and have different ways of determining driver risk levels. Depending on your individual and car-related factors, you will get better prices from some than others. Comparing car insurance deals is a great way to find competitively priced cover.
TPO insurance only covers your legal liability for any third party injury or property damage. It does not cover any damage to your own vehicle or property. If you want extra cover, consider taking out comprehensive car insurance.
Third-party only insurance on a motor vehicle is basically liabilities coverage. It sees that people who were injured or killed in a motor vehicle accident in Singapore can receive compensation irrespective of the financial situation of the at-fault driver(s).
While TPO insurance offers the least protection, you can expect all basic policies to cover at least the following:
Death or bodily injuries to third parties (including passengers)
Damage to property belonging to third parties
Accidents occurring on the road and on private property
As TPO coverage is an entry-level policy, it only compensates the claims incurred for damages you’ve caused on another person’s car or their medical bills. You will be responsible for any repairs to your own vehicle. So before applying, make sure to scrutinise the insurer’s TPO product disclosure statements on what is and is not covered by at-fault insurance. Example of important details to note are:
The people who are entitled to receive compensation
How the compensation can be paid out
The maximum amount of compensation that can be awarded
When should you use TPO insurance?
When you’re using a cheap interim vehicle or when your car is nearing the end of its COE life, which isn’t worth high premiums.
You’re sure that you have enough savings to cover any damages to your car.
You hardly use your car, and if you do, it’s typically for very safe and short trips (e.g. you only drive to the nearby mall during the weekends).
You’re fine with the possibility of losing the car completely, in the case of a serious accident.
If you’ve bought the car on a bank loan or if you’re still paying the instalments, the banks will most likely insist on comprehensive car insurance. It’ll not make sense for them to repossess a car wrapped around a tree.
Where can I buy TPO insurance?
Every state has certain insurance companies that are licensed to sell CTP policies, and some of these companies will permit other agents to sell in their name.
To buy a TPO insurance policy, you will have to provide the insurer or the agent with information regarding your situation. This can include things like:
Your vehicle’s make, model, engine capacity and manufacturing year
Whether you use your vehicle for personal reasons or your business
How old you are or the age of anyone else who may drive your vehicle
Details of any accidents you have been involved in as well as your insurance and claims history
Details pertaining to your driving record, including information on your driver’s licence
While insurers may impose different eligibility conditions, you’ll typically be required to meet the following:
Residency. You need to be residents of Singapore with a valid NRIC/FIN.
Age requirement. The main driver of the car is aged between 24 to 75 and has a valid driving licence of at least 2 years.
Driving convictions. None of the drivers has had any class of licence suspended or cancelled in the last 3 to 5 years.
Vehicle registration. The car is registered in Singapore.
Modifications. Any car modifications must be LTA-compliant.
Private or commercial use. The car is not used for commercial purposes, private-hire, rental or lease.
Application history. You and any of your additional drivers must not have been denied coverage by any insurer in the last three years.
Claims history. You or any additional drivers have never had made more than the insurer’s stated claims threshold.
If the TPO premium is determined based on incorrect information and it leads to a lower premium than you should actually be paying, the insurance company will demand that you pay the difference. If you don’t do so, you could end up causing your insurance policy to be void.
How are insurance prices determined?
Because it’s mandatory and offers the least protection, TPO insurance is the most affordable option. There is an allowable price range, and all TPO insurance premiums must fall within these boundaries.
Insurers determine the risk level for a vehicle and its drivers by categorising a range of factors, and then adjust prices based on these. These factors do not carry equal weight in determining the cost of your premium as each insurer will allocate weighting based on the company’s own statistics and past claims information.
Here are some factors that may affect the cost of your car insurance:
There are multiple aspects of your car that can affect the cost of your motor insurance premium. Here are 3 main considerations:
Make and model of car. Cars that have more expensive parts, such as continental cars, luxury cars and SUVs will naturally cost more to insure. Also, the higher the engine capacity of your vehicle, the higher your premium will be.
Age of the vehicle. Very new cars usually attract higher premiums and then start dipping as your car ages but only up to a point. If your car passes a certain threshold of age (around 10 years), premiums will incrementally increase since it’ll cost more to replace parts.
Car usage. The lesser you drive, the lower the possibility of you getting into an accident, and hence the lower your premium will be. Likewise, commercial vehicles are on the road more frequently compared to private cars, and are therefore at higher risk. Some providers also offer discounts for off-peak cars or vehicles with low mileage.
Individual risk factors
Insurance companies try to consider as many individual risk factors as they can, including:
Age. Young drivers under the age of 30 are deemed to be more reckless and easily distracted, putting them at higher risk of car accidents. Elderly drivers (generally over the age of 65) have also been found to pose a higher risk due to slower reflexes. Hence, these categories of drivers are typically offered higher premiums.
Gender. Insurance companies in Singapore tend to charge higher premiums to men than they do to women as many insurers’ claims data shows that men are significantly more likely to get into an accident than women.
Driving experience. Drivers with more years of experience on the road are perceived as being less likely to get into a car accident, which then translates to lower premiums.
Claims history. When you take up a new insurance policy, you’ll need to declare the number of motor claims that you’ve made in the past 3 years. The more claims you’ve made, the higher your premiums will be.
Driving history. Previous driving convictions and demerit points will also be taken into account when working out your rates.
Marital status. Some insurers believe that married applicants are more responsible, which means that they tend to vigilant drivers, and thus offer lower premiums.
Occupation. Your occupation also serves as a gauge to how frequent your car may be on the road. The more your car is on the road, the higher the chances of an accident. So if your job requires a lot of travelling, you may have to pay higher premiums than those who work from home.
Generally, if you are a safe driver, you are more likely to receive a better price for your car insurance. But even if you are an extremely risky driver, the insurer cannot increase your premiums with very high loadings, which could make the premium unaffordable.
When purchasing car insurance, you are encouraged to shop around for quotations instead of going for auto-renewal. Insurers calculate prices differently depending on the situation of each individual driver, so renewing your TPO insurance with the same provider does not guarantee you will get the lowest price. Also, due to the highly competitive car insurance industry, providers might have promotional rates or offer new features.
If you want to get the best deal, make sure to shop around before purchasing or renewing your car insurance.
How much is TPO for a motorcycle?
There are three different license classes of motorcycles for determining TPO costs.
More powerful motorbike categories carry higher costs, while the rider’s profile also impacts the price you pay for third party only insurance. The extent to which personal risk factors are taken into account will differ between insurers, which is why you should take the time to get quotes from the insurers offering motorcycle TPO insurance.
Frequently asked questions
Premiums increase to reflect changes in driving risk levels. One of the main reasons premiums typically increase is because increasing numbers of people make claims.
There are no differences between TPO policies, irrespective of which insurer you purchased yours from. The only minor difference lies in the additional features such as legal costs and expenses cover (e.g up to S$2,000), and other optional add-on coverage.
All TPO coverage provides the statutory coverage that the law requires.
If you decide to sell your car, scrap it, or become a PHV (private-hire vehicle) driver, you’ll have to cancel your car insurance policy before it expires. When you do so, most insurers will only refund you 70% of the unused portion of your insurance. The remaining 30% will be absorbed by the insurer as an “admin fee”.
All vehicles required to pass an inspection conducted by authorised inspection centres before you can renew your road tax.
*Taxis installed with compressed natural gas (CNG) or bi-fuel CNG systems must have their systems checked every 3 months.
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Zyane Tan is an associate editor at Finder. An experienced copywriter and content creator, Zyane enjoys writing on a wide array of subjects. When she’s not busy typing away, she’s reading and musing over a pint.
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