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Comprehensive vs Third Party car insurance plans in Singapore

There are two main types of coverage of car insurance in the market: Comprehensive and Third Party. What is the key differentiation?

Before you hit the roads in Singapore, you will need to be covered by car insurance. Many of us value conscious drivers tend to opt for the cheapest plans we can get without considering the differences in coverage offered.

To find out the best type of plan for you, we sift through the main differences between the cheapest Third Party Only plans and higher coverage comprehensive car insurance plans.


Third party insurance: Meaning and definitions

The most basic and cheapest type of car insurance you can get on the market is the Third Party Only (TPO). This type of plan is offered by most insurers and meets the minimum legal requirements for driving under Singapore law.

TPO only covers your liabilities for damage or injury/death caused to others and their property — that is, if you hit and injure a pedestrian or knock down a gantry while using the car. Any damage to your own car is your responsibility.

The Third Party Fire & Theft (TPFT) is largely the same as the TPO, but includes some extra coverage, such as payouts in the very specific instances of fire or theft.

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Comprehensive car insurance: Meaning and definitions

This is the highest level of car insurance you can get. It covers your liabilities, plus any damage to your car.

Depending on the plan you choose, there could also be additional features such as personal accident coverage for the driver (up to a certain amount), windscreen replacement coverage, a courtesy car while your vehicle is being repaired, 24-hour roadside assistance for breakdowns (towing and battery jumpstarts), and much more.

Besides vehicle accidents, your car may also receive protection against vandal damage, and “acts of God” such as flooding and falling trees.

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Third party vs comprehensive car insurance

Whether you need a comprehensive car insurance plan or not depends on a few factors.

A TPO or TPFT may be sufficient for you if you are driving a cheap, beat-up interim vehicle that is just waiting to be scrapped. The financial impact of it being totalled in an accident is not so significant. You may not feel like such a car is worth the higher premiums of a comprehensive coverage plan.

If you are a very experienced driver and your car is nearing the end of its COE lifespan, you may not need the extensive coverage offered by comprehensive plans. As such, you could take a calculated and informed risk and opt for a TPO or TPFT.

However, for most other drivers, a comprehensive car insurance plan offers greater protection for you and your vehicle (and peace of mind as well).

For one, it safeguards your savings and/or cash flow. In the event of a mishap, you would only need to pay the excess (a partial amount dependent on your policy tier) for the repairs, before the insurer covers the rest. If you get into a serious accident (touch wood), at least you will be able to shave potentially hundreds of thousands of dollars off your total repair bill.

If you are driving a high-value or luxury car, your car parts are also likely to be more expensive than average to replace and repair. You would be wise to have a high-tier comprehensive insurance plan to cover them.

A comprehensive plan that provides a courtesy car when yours is not driveable is a particularly good option if you are reliant on your car for your job. For example, you are a property agent and need to drive to different sites for viewings or to meet/ferry clients around. Having a free replacement car could save you from having to fork out costly car rental fees.

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Other factors to consider before buying car insurance

The premium you have to pay for your car insurance differs from person to person. It is largely dependent on factors such as your car make, model and age; your age, gender, marital status; driving experience and demerit points; number of claims filed in the last 3 years and No Claims Discount level (NCD).

Different insurers may look at a different combination of factors, or weigh them differently, so it helps to get a few online quotes to see which one offers you the best coverage for your budget. Always remember to read the policy wording document to see what exactly your policy covers and the excess you have to pay under what specific conditions.

If you are a young and inexperienced driver (in your early 20s or have less than 2 years of experience driving), you will likely be charged a higher premium by most insurers because of the higher risk you pose on the road. Check out our article on the best car insurance policies for young and inexperienced drivers to pick the one that best suits you.

Depending on your driving habits and comfort level, you may also wish to purchase some add-ons to your car insurance to get better coverage in certain areas. Here are the ones we think give you the most bang for your buck.

NCD Protector

After years of careful driving and playing by the rules, you do not want to have to sully your record with a claim which could result in a significant rise in your insurance premiums.

Many insurance companies will let you cover your NCD for a fee. Should you need to file a claim, you will still get to keep some or all of the discount, and maintain your premiums.

And even if you do get into an accident and are considered at-fault, your NCD will be protected from dropping by the customary 30%.

Roadside Assistance

When your car breaks down, Roadside Assistance can be a real life-saver. In addition to emergency towing services, you could also get a flat tire change, battery jump start, locksmith service and even emergency fuel delivery.

Personal injury cover

Most comprehensive policies already offer a degree of personal injury cover for the insured but it may be worthwhile to enhance the level of protection to a higher range (for example, from a $50,000 to a $100,000 payout). This is especially important if you do not already have a full coverage health plan or any medical insurance.

Windscreen cover

Windscreen damage can be fairly common but relatively cheap to repair. As such, separate cover may come with a lower or zero excess. It won’t affect your NCD as well, which is a real bonus.

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