How to Find the Best Car Insurance Plan

Car insurance jargon may seem very daunting. But fear not, after reading our trusty guide on how to find the best car insurance plan, you will be well-equipped to get the perfect car insurance coverage for your needs.

red car in field

Shopping for a car insurance policy can be a very complicated task. While it’s helpful to have an idea of the average cost of car insurance for people similar to you or which companies tend to offer the cheapest rates, your individual circumstances and preferences will play an even larger role in deciding which plan will be the most suitable for you.

But what are the major things you should be looking for as you consider your options? We’ve put together a list of what we think are some of the most important things you should know before you decide on a plan.

Table of Contents

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Should you buy Comprehensive, TPFT or TPO?

Third party Only (TPO)Third-Party, Fire & Theft (TPFT)Comprehensive
  • Most basic, no frills
  • Protects affected third parties in an accident (death, injury, damage)  
  • Does not include any coverage for you or your vehicle

*Mandatory to have at least Third Party Only (TPO) car insurance.

  • Covers as per TPO 
  • Covers losses (to you) incurred from damages caused by fire and theft 
  • Includes all the benefits listed in TPO and TPFT
  • Covers accidental damage to your own car as well

*Mandatory for car owners that take on a bank loan when purchasing their vehicle.

One of the first choices you’ll be asked to make when you start to shop for a car insurance policy is whether you want to buy a plan that provides Third Party Only (TPO) coverage, Third-Party, Fire & Theft (TPFT) coverage or  comprehensive coverage. Each kind of plan offers a different level of coverage and is priced accordingly.

Comprehensive plans are the most expensive and have the broadest scope, followed by TPFT plans which run about 20% cheaper, followed finally by TPO plans which insure you only for any liability against the other party in an accident and tend to be about 33% cheaper than comprehensive plans. Depending on your circumstances, this choice may be pretty simple.

Related: Average Price of Car Insurance 2024

average cost of car insurance in Singapore

For anyone financing their new car with a car loan, a comprehensive plan is usually a requirement. This kind of policy will insure you not only for damage caused to the other party in an accident, but also for your own losses. If your car is damaged or totalled in an accident for which you are determined to be at fault, only comprehensive insurance will defray the cost of repairing or replacing it. Comprehensive policies also offer a wider variety of optional features and benefits you can add to your plan to customize it to fit your preferences.

However, if you own an older car (usually over 10 years of age), it may be a good idea to consider buying TPO or TPFT coverage. This is because the market value of your car may be very low due to its age. If you buy a comprehensive plan for such an old vehicle, you may find yourself paying several hundreds of dollars more on your premium every year to protect a car that is no longer worth very much to begin with.

Related: Will You Really Go Broke If You Crash Into a Luxury Car?

How to choose your excess

An “excess,” also known as a deductible, refers to the amount of money you have to pay on a claim before your insurer will step in to cover the rest of the cost (of your car repair or replacement). There are several considerations and categroies when it comes to excess.

Standard excess

It can be a little confusing to figure out what amount of standard excess you should have on your plan. This is an excess you’ll have to pay for every claim you make, and is usually displayed near the quote for the premium when you apply for a quote. As a point of reference, most drivers in Singapore have a standard excess ranging from S$600 to S$800.

While some insurance companies will decide the standard excess that accompanies their policy, others will allow you to choose from a wide range of amounts, from as low as around S$0 to as high as S$2,500. Why would you choose to have a higher excess? You can lower your premium if you increase the amount of excess you would have to pay on each claim. The opposite also applies whereby your premiums will increase if you want to decrease how much you would have to pay in excess. If you want more flexibility in customising your excess and premium to fit your needs, we recommend that you make sure to compare car insurance quotes from companies that offer a high degree of customisation.

Young and/or Inexperienced Driver Excess

If you are a younger driver in your 20s or haven’t held a driver’s license for more than 2 years, you’ll want to watch out for the section on Young and/or Inexperienced Driver Excess in your policy. Many insurers impose an additional excess that comes into play if the driver of the vehicle is considered young and/or inexperienced, due to the increased risk of insuring such drivers. These excesses must be paid on top of the standard excess payable on every claim, and are quite high, as they range from about S$2,000 to S$3,000.

What’s important to note is that different insurance companies have different ages that they consider to qualify as “young,” with some applying the excess to drivers as old as 27 and others only applying it to drivers under the age of 23. Companies may also have different interpretations of what qualifies you as “inexperienced,” with some companies applying the excess if you have less than 1 year of driving experience and others applying it if you have less than 2 years’ experience. Please note that some policies will even impose this excess not only on young and inexperienced drivers, but also on elderly drivers.

Related: What Determines Your Car Insurance Premium?

Unnamed Driver Excess

If you anticipate sharing your car with other drivers not explicitly named on your policy, you should bear in mind that some insurance plans will charge you an Unnamed Driver Excess in addition to the standard excess in the case of an accident. This excess can range widely from as low as around S$500 to as high as S$5,000, with higher excesses usually applying to accidents where the driver involved is both unnamed and young/inexperienced.

Related: 5 Seemingly Harmless Things That Can Get You In Trouble With Your Car Insurer

car driving through an intersection
Source: Unsplash

How to choose which features to include

If you’re buying car insurance for the first time, you may find the long list of benefits and features detailed on each insurance policy to be somewhat overwhelming. It can be hard to distinguish between the features you definitely need, and the features that would be nice to have, but aren’t essential. This is especially the case when companies offer several tiers of comprehensive plans. We’ve pinpointed the main aspects of a standard comprehensive plan that you’ll want to pay attention to in order to help streamline the process.

Essential features

The following features and benefits form the basis of most comprehensive car insurance plans in Singapore. Most insurance companies include these features in your policy and will not ask you to pay extra for them, though there are some exceptions you should keep an eye out for. We advise that you make sure you are happy with the level of coverage provided in these categories before worrying about additional features.

Loss/damage to insured vehicle

Generally, insurance companies will pay up to the market value of your car at the time of the accident to repair your car. But you should keep in mind that some companies do not provide coverage for any damage or loss resulting from uncontrollable natural disasters like floods and this very important information is usually in the fine print of policy documents. We would advise you to read carefully through the policy documents to see if your policy includes this aspect to avoid any unpleasant surprises.

Personal accident & medical coverage

While most comprehensive plans include personal accident & medical benefits, companies differ in both the level of coverage offered as well as who and how many people are covered under the policy. Most plans typically include coverage for personal accident benefits in the range of S$20,000 to S$50,000 and medical expenses in the range of S$500 to S$1,000. However, some policies may offer more extensive coverage not only for policyholders but also for other passengers in the car. This is usually to the order of S$10,000 per passenger for personal accident benefits, with the same amount covered for medical expenses as for the policyholder. In the basic comprehensive tier plan, some insurers might only cover the passengers for personal accident benefit (such as Singlife Motor Lite). 

Keep in mind that there are insurance companies that might also not automatically include personal accident benefits or coverage of medical expenses in the quote they offer you, instead offering it as an additional feature you can pay extra for. We advise you to look carefully at the fine print of the policies you are considering to see if personal accident benefits and medical expenses are already baked into the plans and if they extend to anybody else who might be traveling in your vehicle at the time of an accident.

Related: So, You’ve Gotten Into a Car Accident. Here’s How It Will Affect Your Insurance Policy

Optional features to consider

Beyond the standard areas of coverage for comprehensive car insurance plans in Singapore, there are a host of additional convenience benefits and features available that can make your life easier if you get into a car accident. Depending on the insurer, you’ll be able to access these additional benefits and features by upgrading to a higher-tier/premium plan or by adding them individually to your policy.

Below, we’ve detailed some of the most common premium features you might consider adding to your plan if you think it’s worth the cost.

Loss of Use

If you get into an accident and your car needs to be taken to a workshop for repairs, you may find yourself in somewhat of a pickle, without any way to get around. To ameliorate this inconvenience, insurance companies offer a “loss of use” benefit, in which they’ll pay you a daily stipend to help to cover the cost of transport until your car is fixed. The stipend usually amounts to about S$50 a day, with the number of days it is offered is typically capped at 5 or 6 days after the date of the accident.

Loss of use is definitely a feature that you want to look out for in the wording of your plan’s policy documents. Though it is not typically considered a “standard” feature of comprehensive plans, some insurers actually do include it automatically in their plans (though its inclusion may result in a more expensive quote), while others allow you to add the loss of use benefit by paying an extra S$50-90 on your premium.

NCD Protector

No Claims Discount (NCD) Protector prevents your NCD from dropping at all if you get into a car accident. Without it, your NCD would take a hit of 30% when you get into an at fault accident. Not only will you have to potentially pay hundreds of dollars more on your premium when you renew your policy, you will also have to maintain 3 consecutive years of driving without filing a claim to build your NCD back up to the level it was prior to the accident (assuming NCD of 50%).

Many insurers offer a NCD Protector benefit for roughly an additional 10% on your premium, though some companies (for example FWD comprehensive plans) grant a complimentary NCD Protector to drivers who already have a 50% NCD. We think that an NCD protector is a highly valuable feature well worth paying a slightly higher premium for if your budget permits it (especially if your NCD is 40% or 50% currently), as it could save you hundreds of dollars and grant you significant peace of mind.

Upsell features

Generally, if there’s a service you would like to pay for, the odds are an insurance company will be happy to sell it to you. Here are a selection of some additional features you may be interested in including in your policy.

  • Coverage in Malaysia & Thailand: If you do a lot of driving in West Malaysia or Southern Thailand, there are insurers that will cover repatriation costs not only for your vehicle but for yourself for as little as about S$10 extra on your premium.
  • Ability to choose your own workshop: If you want to be able to choose your own workshop for car repairs after an accident, you can expect to pay anywhere in a range of about S$170 to S$450 extra on your premium to do so, either by adding it as an individual feature or by upgrading to a higher tier of comprehensive plan.
  • Other features: Other examples of additional optional features you might be interested in adding to your plan include extra coverage for personal belongings, car accessories, audio equipment, key replacement, and even child seat covers.
parked cars
Source: Pexels

How to Pick the Best Car Insurance

Finding the best car insurance for you depends on your budget, your car and the amount of coverage you want. However, just because you are on a budget does not mean it is a good choice to go straight for the cheapest plan, as tempting as it can be.

In some cases, like if your car is over 10 years old, you’ll actually be better off with a cheaper TPO or TPFT coverage plan. This is because your car might have depreciated in value to the point where a bare minimum basic plan will do. However, in most circumstances, getting a more comprehensive plan (that you can save on costs through other ways such as being a safe driver, utilising your NCD and comparing car insurance offerings) can be a life-saver.

You can also find a policy based on your needs and lifestyle. For example, If you tend to drive in West Malaysia or Southern Thailand, you can find a plan that covers those territories. If you have a family, you can opt for a plan that is generous with personal accident and medical coverage and includes your passengers. If you would like further information on how to navigate the car insurance space, you can read our guides to help you compare and find the best car insurance plan.

Consumers should make informed and calculated decisions by collecting more information on a product, looking at all the facts, and making prudent comparisons. Compare the best car insurance policies on the market here, or find out more about insurance coverage in general here.

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Cover image source: Pexels

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