IT IS compulsory for a car owner in Singapore to purchase insurance cover. There are three main categories of motor insurance, which provide different types of coverage.
Types of plans
Third party only
This covers the insured person if third parties such as passengers are killed or injured.
It also covers damage to property belonging to third parties.
Third party, fire and theft
This is an extension of the third-party-only cover.
In addition, this policy provides protection for the insured's own vehicle against loss or damage resulting directly from fire or theft.
Comprehensive
Most car owners here opt for the comprehensive plan, as it gives the widest protection.
Besides the coverage provided in the other two types of motor plans, it covers damage to the insured's vehicle as well as to other vehicles that the insured person uses with the permission of the owners.
Most insurers offering private car insurance also provide personal accident and medical expenses cover to the insured.
Some insurers allow the extension of these types of coverage to authorised drivers and passengers in the vehicle.
What to look for
IN RECENT years, insurers have been trying to compete among themselves by offering motor insurance products that come with different benefits.
These include varying accident repair options, cover for windscreen damage and protection for the no claim discount (NCD).
That was why General Insurance Association of Singapore (GIA) president Derek Teo said that premiums are not the only determining factor when choosing a motor insurance plan.
'We urge motorists to shop around as the lowest price for your motor insurance no longer means you are getting the best value for your money.
'Cheap is not necessarily the best,' he said.
Mr Kevin Goulding, the country manager and president of motor insurer American Home Assurance (AHA) Singapore, believes that a 'good motor insurance programme should be value-added in terms of good product benefits, efficient, friendly and professional service and competitive pricing'.
A member of the AIG group, AHA is Singapore's No. 1 motor insurer, with nearly a 25 per cent market share.
Factors to consider when shopping for car insurance include:
Motor premiums
Premiums are charged according to a range of factors. They include the vehicles' make, model and age; drivers' age, sex and occupation; and the claim history of the insured person.
Insurance cooperative NTUC Income uses 'more than 10 rating factors' to determine the premium.
'This is to ensure that our customers are charged premiums that are commensurate with their risk profile,' said an Income spokesman.
Income has a market share of 21.5 per cent in terms of gross written premiums, and insures about 265,000 cars or 30 per cent of the market.
AHA customers enjoy a discount on premiums if they limit the age of drivers covered under the policy to, say, above 30 years.
Amount of excess or deductible
Find out the amount of 'excess' applicable to the insured, named driver and unnamed drivers. This refers to the portion of the cost you might be required to bear when a claim is made against your policy.
Generally, a basic excess is applied to all motor policies. For young and inexperienced drivers, a higher excess is imposed.
For instance, Income said that its standard excess is $500. For a driver with less than two years of driving experience, an extra $1,000 excess is applicable. For a driver under 26, an extra excess of $2,000 is imposed.
Income does not impose an excess on elderly or unnamed drivers.
AHA said its policyholders can opt to customise the amount of policy excess. Otherwise, a standard excess of $500 is usually applied to all drivers.
Windscreen damage
Most insurers provide windscreen cover free of charge but apply an excess of $100 for each claim, with the exception of AXA Insurance, which does not charge an excess.
AXA said it also provides free reinstatement of the windscreen cover with no excess without affecting the NCD. AXA is the No.3 market player, with 13 per cent of the motor insurance market.
Courtesy car
Some insurers provide a courtesy car when the damaged insured vehicle is under repair.
HSBC Insurance provides a complimentary loss-of-use rental car for 10 days for selected plans.
Income's new drivo plans offer the use of a courtesy car for up to 14 days.
For selected plans, AHA guarantees the availability of a replacement car within five hours. The replacement car will be less than three years old.
Such a service is not available at AXA.
No claim discount
If you have not made a claim for a year, you are entitled to an NCD on renewal, which reduces the policy premium for the following year.
This means that after five years of zero claims, it is possible to enjoy an NCD of 50 per cent, which effectively halves your motor premium in the following year.
Some insurers such as Income and HSBC allow customers to buy protection against the loss of the NCD.
'Policyholders who enjoy a 50 per cent NCD may choose to pay an additional premium of 10 per cent to protect it for one claim in the year,' said an Income spokesman.
At HSBC, the additional premium works out to between $80 and $100.
AHA said that it is working towards a similar benefit.
Personal accident cover
Both AHA and HSBC provide personal accident cover of $50,000 for the insured person and $10,000 for passengers.
Income offers personal accident cover at $20,000 for the insured and $10,000 for passengers.
Different repair options
Check for restrictions on who can repair your car and whether it will be repaired with new parts. The cheaper premium policies tend to have more restrictions.
Currently, most insurers allow their customers to have their cars repaired at their preferred workshops.
At Income, customers will enjoy lower premiums if their damaged vehicles are repaired at the company's authorised workshops.
AXA customers who opt for AXA's panel of workshops enjoy benefits such as a nine-month warranty on repairs.
New-for-old replacement
If a car is written off in an accident, AHA said it will pay the full purchase price to buy a brand new car of the same make and model if the insured vehicle is less than 12 months old.
Towing and roadside assistance
Some insurers such as AHA provide free 24-hour breakdown towing and roadside assistance for its selected plans.
