1) Why do I need motor insurance?

In Singapore it is against the law to drive a motor vehicle on the road without a valid insurance policy. The minimum requirement is that the policy provides cover for personal injury to other parties.

Motor insurance makes good sense. Besides covering you for personal injury to third parties, it could also cover you for costs if you damage someone else's property or for any other loss or damage you might suffer in a motor accident.

Remember: always carry your Certificate of Insurance in your vehicle. The police may ask to see it in a routine check and it contains useful information that you will need should you be involved in an accident.

2) What types of motor insurance policies are available?

Insurers offer three main types of motor insurance policies. Optional benefits are available to meet your individual needs.

Third Party Third Party, Fire and Theft Comprehensive Optional benefits for comprehensive policies (may be subject to payment of additional premium)
Death or injury to other parties Death or injury to other parties Death or injury to other parties Windscreen Damage
Damage to other parties' property Damage to other parties' property Damage to other parties' property Damage arising from riot, strike and civil commotion
Fire damage to, or theft of, your vehicle Fire damage to, or theft of, your vehicle Damage arising from flood and windstorm
Accidental damage to your vehicle Liability of passengers for acts of negligence
Personal accident cover (private car only) Personal accident benefits for passengers
Medical expenses (private car only) Additional excess
No-Claim Discount protection (private car only)

3) How does the insurer set my premium?

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:

  • Make and model of vehicle
  • Engine capacity
  • Age of vehicle
  • Age, sex and occupation of drivers
  • Driving experience of drivers
  • Claims history of drivers
  • What vehicle will be used for (private use/corporate use/commercial use/hire etc)
  • Type of cover
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 a range of statistics and past claims information.

4) What does my insurer need to know about me?

The insurer needs to know some information about you. This is to help it assess the business accepted from you and your needs as a policyholder. The proper premium can then be set.

It is important to answer these questions truthfully. Failure to do so may affect the level of payout you receive in the event that you make a claim. The following are some questions you may be asked:

  • Have you made any recent claims?
  • Have you ever received a ticket or been charged for a driving offence?
  • Has your vehicle been modified?
  • Who will be driving the vehicle?
  • What will the vehicle be used for?
  • Have you had any recent motor accidents?
  • How long have you been driving?
  • Do you have any medical conditions or disabilities that may affect your driving?
If you do not understand what is being asked, please clarify with your insurer, agent or broker.

5) What is the insurer recommended to disclose to me when I buy an insurance policy?

  • The premium payable
  • The excess (for insured and drivers - named and unnamed)
  • The scope and period of coverage
  • Restriction on drivers (if any)
  • Restriction on repairs
  • Non-standard exclusions
  • Special accident reporting and claims procedures
  • The insurer's cancellation and refund policy
The General Insurance Association of Singapore (GIA) recommends that your insurer provides a one-page 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 there are no surprises should you need to make a claim.

6) What is a No-Claim Discount (NCD)?

If no claim has been made under your policy for a year or more, you are entitled to a No-Claim Discount (NCD). The NCD reduces the premium for the following year. This is your insurer's way of recognising you for having been a careful driver. The following table shows how the NCD is set by all insurers across the industry.

Private car policies Commercial vehicle and motorcycle policies
Period of insurance with no claim Discount on renewal Period of insurance with no claim Discount on renewal
1 year 10% 1 year 10%
2 years 20% 2 years 15%
3 years 30% 3 years or longer 20%
4 years 40%
5 years or longer 50%

a) If I make a claim, will I automatically lose my NCD?

Not necessarily. Your NCD may not be affected if you are found totally not at fault in an accident involving an identified vehicle. In all other cases, your NCD may be affected.

If there is a claim made under the policy, your NCD will be reduced as follows.

Private car policies Commercial vehicle and motorcycle policies
Current NCD NCD after 1 claim Current NCD NCD after 1 claim
50% 20% 20/15/10% 0%
40% 10%
30% and under 0%

Please check with your insurer whether your NCD will be affected.

b) Does my NCD apply to me, or to my vehicle?

In principle, your NCD applies to you and not to your vehicle. For example, if you sell your vehicle and buy another one, you will retain your NCD. However, if you own more than one vehicle, you might have a different NCD for each vehicle. You should check the details with your insurer, but generally:

Your NCD can:

Be transferred to another vehicle you own, but it cannot be applied to more than one vehicle at any point in time. For example, if you have accumulated a 30% NCD while using one vehicle, it does not follow that the same NCD applies to any other vehicle that you own or decide to buy. In other words, you will have to earn the NCD for each vehicle separately.

Your NCD cannot:

Be transferred to another person.

7) Can I insure against the loss of my NCD?

If you have accumulated a 50% NCD (five years or longer without a claim), some insurers may allow you to buy protection against the loss of the discount.

By paying a small amount of extra premium, you can make one claim during the year, and still have the discount fully protected. The 50% NCD is protected as follows:

Claims during the period of insurance Private car policies
1 50%
2 20%
3 or more Nil

Please check with your insurer whether NCD protection cover is available.

8) Will I lose my NCD if there is a break in ownership of my vehicle?

Most insurers in Singapore will allow you to keep your NCD should there be a break in ownership for up to 24 months. Some insurers set the timeframe at 12 months. You should contact your insurer for details.

9) Do I get a refund if I cancel my policy?

The common practice is that both you and your insurer can cancel your policy for any reason by giving seven days of written notice to the other party. If 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 if a claim has been made on the policy.

Always check carefully and understand what is covered before you take up a policy.

10) How can safe driving save me even more money?

If you have not violated any traffic rules for three consecutive years, you are entitled to a Certificate of Merit from the Singapore Traffic Police.

Should your NCD be 30% and above for a private car policy or 20% for a privately owned commercial vehicle policy, some insurers may reward you with a further 5% discount upon presentation of your Certificate of Merit.

For details, please visit the website


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