Everything You Need To Know About Car Insurance in Singapore

All of your questions answered about car insurance in Singapore, costs, claims, and how to find the best deal. 


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In Singapore, if you own a car, car insurance is compulsory. But even if insurance weren’t made compulsory, we are sure you would want to insure your car against accidents and damages, given how much a vehicle can cost in Singapore – after all, Singapore is one of the most expensive places in the world to own a car.  

There are many things to consider when it comes to buying motor insurance and this comprehensive guide will help you make an informed choice.

Why do you need car insurance?

Under the Motor Vehicles (Third-Party Risks & Compensation) Act, if you want to drive a vehicle on a public road in Singapore, you have to have insurance coverage, which will cover the death or injury of anyone caused by that vehicle. If you don’t have insurance, you can be fined up to $1,000, jailed up to three months, or both. On top of that, you'll also be disqualified from holding or obtaining a driving license for 12 months from the date you are convicted. 

Legal penalties aside, getting into an accident while driving without insurance could also cause financial ruin. Apart from having to pay for car repairs, if you injure someone, you could be sued for any losses, damages and medical expenses. The amounts sued for in cases of serious injuries or death could run into hundreds of thousands of dollars, or even millions. This is a cost that will be borne by the insurance company if you take out a policy.  

So having adequate car insurance is really about protecting yourself. 

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Important terms in car insurance policies


This is the amount you have to pay for your insurance policy. You could pay for a year’s premium upfront, or you could do monthly instalments through your credit card or Giro arrangements, depending on the insurance company.  



An excess payment is the amount of money that you’ll have to pay out of pocket for damaging your car or another person’s car before the insurance company will cover the rest. Let’s say your excess payment is $500 and you hit your car, incurring repair costs of $2,000. You have to pay the first $500 for repairs, and your insurance company will fork out the remaining $1,500. 

The higher the excess on your policy, the lower the premium. Conversely, the higher the excess, the lower your premium. It may seem like a good idea to go for an insurance policy with a high excess to lower your premium, but if you get into an accident, you will have to pay the high excess out of pocket, which could be painful. 

So if you’re not a great driver, consider a policy with a low excess to save your wallet in the event of an accident. But if you’re skilled and confident and think your chances of an accident are low, you can consider going for a policy with a high excess and low premium. Just make sure you can afford the excess that you opted for should you get into an accident. 

There is an exception to this: if the insurance companies see you as a risky driver, they might make you accept high excess but without the low premium.     

Read article: How to choose car insurance in Singapore

No Claims Discount (NCD)

Also known as a no claims bonus, this is your insurance company’s way of recognising and rewarding you for having been a careful driver. It is a count of the number of years in which you haven't made a claim on your car insurance policy and reduces the premium you have to pay the following year. Insurers will usually give a 10% discount for every year that you don’t make any claims, up to a limit of 50% for five years or longer. But at least one company in Singapore is offering a 60% discount after 10 consecutive years of no claims. 

Period of Insurance with No Claim Discount on Renewal
1 year $0.10
2 years $0.20
3 years $0.30
4 years $0.40
5 years or longer  $0.50

Conversely, if you make any claim under your car insurance policy, your NCD will be reduced as shown in the table below:

Current NCD NCD After 1 Claim
$0.50 $0.20
$0.40 $0.10
30% and under $0.00

Also, if you make more than one claim in a year, your NCD will be cut to 0%.

Because of this, sometimes, people prefer to pay for the cost of a smaller accident or damage themselves if it comes up to less than what they would lose in their NCD. 

Some insurance companies offer an NCD protector on their policies, which means you can pay an extra fee to have your discount kept intact even if you make a claim. However, this is usually only good for just one claim, so you still need to be careful on the road.

Your NCD is usually tagged to your name and not to your car, so even if you change a car, you can retain your NCD. 


Main driver/Named driver

These terms can be used loosely by different insurance companies, but generally, the main driver is the policyholder and also the person who drives the car most frequently. Named drivers are other drivers whom the policy owner declares are allowed to drive the car, such as other family members. It is important to add other people who will be driving your car to your policy so they will also be covered. 

Some insurance companies allow up to five people to be added to a policy free of charge, although young and inexperienced drivers may be slapped with a higher excess. Other insurance companies may do away with the need for you to name the other drivers and will cover them all the same, but read through the fine print to be sure.  

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Types of Car Insurance

There are three types of car insurance to choose from: Third party only insurance; third party, fire and theft insurance; and comprehensive car insurance.  


Third Party Only Insurance

Third Party Only (TPO) insurance is the option with the lowest cost, but it also provides the least coverage – it will cover only damages that you cause to other people’s property, such as their car, fences or streetlights. If you cause death or injuries to passengers and third parties, your insurance company will also cover that. 

The policy will not cover damages to your own car however. 

So if you knock into someone’s car and dent both your car and the other person’s, your insurance will pay for the repair of the other person’s car, but it will not pay for you to repair your car. Any repairs to your car will have to be paid on your own. 
Some people go for TPO insurance if they drive an older car that they don’t mind banging up a bit, or which they might be willing to scrap if the car becomes wrecked. 

TPO insurance is the minimum coverage you can have on your vehicle. Note that some insurance companies do not do TPO insurance. 


Third Party, Fire, and Theft

This policy is similar to the third party only policy in that if you were to knock into another car, your policy will cover damages to the other party’s car, but not yours. 

However, this policy will cover damages if your car were to catch fire, be vandalised, or get stolen.  


Comprehensive Car Insurance

This is the most expensive option, but also the one that gives the most coverage. In general, most comprehensive policies will at the very least cover damage to your car from accidents – whether or not it’s your fault – and also fire, theft and vandalism. The policies will also cover damage that you cause to other people’s property or injury to another person. 

Other things that are covered under a comprehensive insurance package will differ depending on the insurance company and the policy – for example, some insurance companies cover civil riots and acts of God like flooding, while others will not, or offer it only as an add-on. Also, different policies sold by the same company can offer coverage for different items such as whether a courtesy car will be provided if your car is in the workshop, or whether your personal items are also insured. 

If you take a bank loan to pay for your car, your bank may insist on comprehensive coverage to protect itself. 

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Factors that affect the cost of car insurance

The cost of car insurance will vary from driver to driver based on factors such as age, gender and years of driving experience. This is because the insurance companies are trying to work out how likely a particular driver will end up in an accident and how much the insurance company will have a payout in an accident. 

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Here are some things that may affect the cost of your car insurance, although these factors do not have equal weight in influencing the cost of your premium. Each insurance will give each risk factor a weighting based on the company’s own statistics and past claims information. 

1. Gender: Although female drivers are often the subject of jokes, some insurance companies believe the opposite – that women are safer drivers, and therefore, the premiums charged to female drivers may be less than that of male drivers. 

2. Age: It has been shown that young drivers are more reckless, easily distracted and more likely to crash when driving, so it is risky to insure this category of drivers. Elderly drivers, too, have been found to pose a higher risk because of their slower reflexes. So in Singapore, generally, people under the age of 30 and over the age of 65 can expect to pay higher premiums.

3. Occupation: Sometimes insurance companies look at your occupation to gauge how often your car will be on the road. The more your car is on the road, the higher the chances of an accident, so if you hold a job that requires a lot of travelling, such as in sales, you may be charged higher rates than those who work from home. 

4. Car usage: Likewise, the less you drive, the lower the premium because the chances of getting into an accident are lowered. Some insurance companies give a discount for cars with low mileage or off-peak cars.    


5. Driving experience: Besides considering your age, insurance companies also look at the number of years you’ve been driving, which they take as a gauge for how experienced you are. Generally, new drivers will be charged a higher premium.


6. Marital status: Some insurance companies believe that being married means you are a more responsible person, and therefore a more careful driver, so your premiums may be lower.  


7. Make and model of car: Continental cars, luxury cars and SUVs will cost more to insure because it will cost more to repair them. Also, policies covering cars with higher engine capacities tend to cost more.  


8. Age of car: Newer cars attract higher premiums and then premiums will start dropping as your car ages, but only up to a point. If your car is older than 10 years old, premiums start going up again because it costs more to replace parts for their parts. 


9. Claims history: When you take up a new insurance policy, the number of claims that you’ve made in the past with this particular company as well as other providers will be taken into account when working out your premium. Obviously, the more claims you’ve made, the higher your premiums will be.


10. Driving history: Any previous driving convictions and demerit points may affect your premium.


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Things that can void your insurance

There are some things that could cause your insurance policy to be void and could lead to you driving without insurance, which is a criminal offence. Here are some circumstances that could invalidate your policy, or cause your insurance company to cancel your insurance. 


Not being honest

If you got into an accident and did not state truthfully what happened, or lied about who was driving your car when the accident happened, the insurance company can refuse to cover you when it finds out the truth. 


Not being cooperative

If you refuse to work with the insurance company or give it the information it asks for to investigate your claim, it can deny you coverage.  


Drink driving or driving under the influence of drugs

If you drive after drinking or taking drugs, your policy will not cover you. 



Insurance companies will charge higher premiums to people with a bad driving record because they are considered high risk. Some of these bad drivers might then attempt to lower their premiums by buying car insurance under the name of a better driver. This is known as fronting and is considered fraud. 

If you engage in fronting and the insurance company finds out, your claims will not be entertained and your policy will be cancelled, especially if you get in an accident.

But even if you don’t engage in fronting and merely lie about your details, such as your years of driving experience, your policy can still be voided.


Illegal racing

You will not be covered for any claims if you get into an accident while speeding for illegal recreational purposes, for example, participating in a street race.


Car Modifications

Modifying your car may jazz up your wheels, but they must be LTA-approved modifications, otherwise, insurance companies will not accept them. You must also always declare any modifications made to your car when you take out a policy, because any undeclared modifications may make your claim invalid. 

Also, some companies will not insure the modified parts of the car, while others consider modifications as one of the factors in deciding the premium for a policy.  

Already bought the policy and want to modify your car? Check with the insurance company beforehand to see whether your planned modifications are accepted under your policy. 


Using the car for any other purpose except as a private car

Car insurance policies cover private cars, and using your car for commercial purposes or for earning money will void your policy. If you are using your car as a Private Hire Vehicle, for instance, you will require coverage for the commercial use of your vehicle.

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Additional insurance options to consider

An insurance policy should meet your specific needs so this you can opt for add-ons that might be useful for you. Here are some additional options that you can add onto your policy for an additional cost. Note that some insurance companies include these add-ons as part of their policies. 


Loss of Use Benefits

If your car is in the workshop and cannot be used, getting this add-on will give you a transport allowance or the loan of another car to use in the meanwhile.


Personal Accident Coverage

In the event of a serious accident that causes disability or death for the driver, you will receive a payout. The amount paid out depends on your policy.


No Claims Discount Protector

Adding this to your policy will ensure you retain your NCD even if you get into an accident. This is valid for only one time, however. 


Workshop of your choice

This will allow you to use your preferred repair workshop instead of visiting the insurance company’s authorised workshops. 

This makes a difference because if you just bought a car which is under warranty, you need to use your dealer’s workshop. 

On the other hand, if you are driving a second-hand car, an older car that’s no longer under warranty or a parallel import, and you don’t mind going to your insurance company’s authorised workshop, this will help save on your premiums.  


24-hour breakdown or accident assistance

Under this add-on, the insurance company will send roadside assistance if your car breaks down or you get into an accident.

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How to get cheap premiums

There are some factors that affect the premium of your car insurance which cannot be altered, such as your age, your number of years of driving experience and the make of the car. Luckily, there are other factors that you can tweak to keep your premiums low: 

• Aim for a No Claims Discount

Insurance companies reward safe driving with a No Claims Discount, which is a discount off your premium for not making any claims. So safe driving is a good way to get lower premiums. 

Also, If you have not violated any traffic rules for three consecutive years, the Singapore Traffic Police will award you with a Certificate of Merit. Some insurance companies will give you a further discount upon presentation of your Certificate of Merit if you have not made a claim for the past few years.


• Don’t get an NCD protector

A No Claims Discount protector will help to preserve your No Claims Discount should you get into an accident. But if you’re confident you won’t get into an accident, going without the protector will save you money. 

Read article: Is an NCD protector worth the money?


• Go for high excess payments

If you’re a skilled, confident driver who thinks your chances of getting into an accident are low, go for a policy with a high excess and low premium. 

Take note however that if the insurance companies see you as a risky driver, they might make you accept high excess but without a corresponding reduction on your premium. 


• Choose policies that require you to use authorised workshops

Policies that restrict you to the insurance company’s authorised workshops will usually come with a lower premium than policies that allow you to go to any workshop you like. 


• Don’t add risky drivers to your policy

Adding risky drivers such as drivers who are young or inexperienced could push up your premiums. On the other hand, if you add a safe driver with a good record to your policy, it could even out the risk and help to cut the premium.  


• Install an in-car camera

If you have a front car camera in your car to record continuous video footage of your journey, some insurers will give you a discount off your premium. Besides earning you a discount, an in-car camera with recorded footage is possibly the best evidence in accidents and can help your insurance company settle claims more quickly. 


• Opt out of personal accident coverage

If you already have a separate personal accident insurance policy, then choose a car insurance policy that does not include personal accident coverage. 


• Don’t pay for what you don’t need

Some policies include things like transport allowance or courtesy vehicles should your car be stuck in a workshop; round-the-clock phone assistance if your car breaks down or gets in an accident; and repatriation costs if you need your car towed back to Singapore from West Malaysia and Southern Thailand. These things often cost extra, so if you don’t think you need these services, go for policies without them to cut down on your premium.

Read article: 5 ways to lower your car insurance premiums


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Cancelling your car insurance

You may have intended to keep your current car for the long haul, but have changed your mind and are selling it or scrapping it. So what happens if you want to cancel your car insurance? 

Some insurance companies require that you cancel your policy in writing, while others allow you to e-mail or call them. So check the requirements with your own company. 

If you paid your premium upfront and in full, insurance companies will refund you the unused portion of your car insurance minus a percentage, which they retain as administration fees. The amount retained differs between companies. If you are paying in installments, your installment payments will be stopped. 

However, you must not have made any claims on your insurance policy for that year. If you did, you will not receive any refunds. 

Which is the best car insurance?

The best car insurance is the one that suits your needs best. For instance, if you drive a beat-up car that’s on the verge of being scrapped, a third party only insurance may suit you. On the other hand, if you’re the owner of a brand new car which you need to take to the dealer’s workshop for repairs, you will have to take a policy that will let you to use your own workshop instead of the insurance company’s authorised workshops. 

An extremely careful driver? You could go for a policy with high excess which will offer you a lower premium. Are you someone who relies heavily on your wheels? Make sure your policy provides you with a loan car should your car need to go to the workshop. 

There is no one-size-fits-all when it comes to car insurance, and what works for you may not work for another driver, so do shop around for an insurance that will cover the things important to you. 

Compare the best car insurance on GoBear.com!

Five common car insurance mistakes in Singapore

When it comes to buying car insurance, certain mistakes can cause your premium to go up, or worse, void your policy. Here are the top five mistakes to avoid when insuring your car in Singapore: 


1. Not shopping for the best deals

Do not go for auto-renewal when it comes to buying car insurance. Because of the highly competitive car insurance industry, insurance companies might have promotional rates or new features the next time you renew your insurance and you might want to switch companies to get the best deal. 

But don’t run around trying to get the best deal; go to a comparison website like GoBear instead, which features 20 insurance plans from 10 insurance companies, and also shows you the latest promotions on car insurance at one glance. 


2. Not updating your insurance company on major changes in your life

Insurance companies determine your premium based on many factors such as your marital status and occupation, so informing the insurance company about any life changes could lower your premiums. Married people enjoy lower premiums, for example, as do people who work at indoor jobs that do not require a lot of travelling.  

Conversely, if your child just got his driving license and wants to borrow your wheels, you need to update your policy to cover him or her. This is because if an accident were to happen when the unregistered driver is driving the car, the insurance company may not make any payouts for it.  


3. Lying about your driving history

Think accidents that happened in the past stay in the past? Not so. Insurance companies always run checks with the traffic police when they receive a new insurance application. Any traffic accident or insurance claims made previously will be surfaced so there’s no point lying. 

Also, do not omit details or tweak the facts on your policy application by, for example, not declaring the actual number of drivers for the car, or using a personal car for commercial purposes. If the insurance company finds out the truth, it could raise the premiums or even void a policy.


4. Always going for the cheapest rates

The cheapest insurance does not mean it’s the best. For example, even though a third party only coverage is the cheapest option out there, you might end up paying big time if your car got damaged in an accident. Or if you opted for high excess to decrease your premium, a big repair job could cause you financial ruin. 

When picking your car insurance coverage, always take into account the amount of risk that you can bear.


5. Not knowing your policy well

When getting a car insurance policy, do not make assumptions on what the policy covers – make sure you read the fine print and understand it, especially technical terms like No Claim Discount or named driver. You don’t want to assume you’re covered for a particular thing and then find out you don’t have the coverage when you need it.

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Where to buy car insurance

You could go from agent to broker, looking for the best deals, or you could to go a comparison website like GoBear. On GoBear, you will be shown instant quotes from more than 20 plans from 10 insurance companies in Singapore, so you can compare their plans side by side. You can also narrow down your choices by choosing which plans you want to compare. 

    To use GoBear’s car insurance comparison tool, go to its car insurance web page and choose the kind of insurance you want. Enter your age, marital status, gender and the number of years you have been driving. Then enter the amount of your no claims discount as well as the make of your car, the model, its capacity and the year, and you will be shown the type of insurance plans that will suit your needs, together with a quote.  

    You can also fine-tune your results by adjusting the range of excess you are willing to pay, as well as the coverage you want for personal accidents for the driver, medical expenses, towing services and daily transport allowance.  

    The assumptions made by GoBear in giving you an instant quote is that:

    • you’re the registered driver of the car
    • the car is registered in Singapore
    • your license hasn’t been suspended or cancelled in the last five years
    • you’ve had no demerit points, accidents or claims in the last three years
    • you haven't been denied coverage by any insurer in the last three years
    • you don’t use your car for work or making money
    • any car modifications must be if LTA-compliant

    I got into an accident. What now?

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    At the scene of the accident


    • Check if anyone is injured  

    If someone is seriously injured, call for an ambulance at 995 immediately. Do not move the injured person or vehicles while waiting for help. 


    • Report the accident to the police

    Call 999 if the accident involves fatalities, pedestrians or cyclists, hit-and-run cases, serious injuries, damage to government property and foreign vehicles.


    • Gather evidence of the accident

    Take pictures of the accident scene and the surrounding areas. The pictures should capture the entire scene, including lane markings, skid marks and any debris nearby. Also get pictures of the damage to your own vehicle and the other vehicle (try to make sure the licence plates are visible). 

    Save a copy of any relevant in-car camera footage which you have recorded. Also take note of the time of the accident, as well as the weather and road conditions at that point. 


    • Do not move any of the vehicles involved

    Make sure you get enough photographs of the accident scene before moving the vehicles involved. Moving the vehicles before evidence is gathered may affect the parties’ liabilities. You do want to avoid obstructing traffic though, so act quickly. 


    • Exchange information with the other party

    If the other party involved in the accident is not seriously injured, exchange the following information with the other party: Full name, NRIC number/FIN, phone number, home address and insurer details. 

    If there are other parties involved, such as passengers, pedestrians or witnesses, you should also get the above information from them.

    Read article: 10 common causes of traffic accidents and how car insurance can help


    After the Accident


    • Report the accident to your insurance company

    All accidents should be reported to insurance companies within 24 hours, or by the next working day. If you don’t do so, your insurance company can reject your claim, you may lose your No Claim Discount when renewing your policy or your insurer may not even renew your policy the next round. 


    • Make your claims

    As each car insurance company has its own procedures, follow your insurance company’s instructions on where to go to get the damage assessed and repaired. You will be required to complete a Motor Accident Report form. After repairs have been completed, you should check that it is to your satisfaction. 

    To claim from another person’s insurance, contact their insurance company and allow them to assess the damage before you send your car for repairs. The third party insurer has up to two days from the point of contact with you to inspect the damage. Take note that it has to compensate you for the loss of use of the vehicle over the pre-inspection period. 

    After the investigation, the insurance company will make an offer to settle the claim if it is a legitimate claim. You will have to sign a claims discharge form indicating your acceptance of the settlement.  

    If you need the other party’s insurance details but did not get them at the time of the accident, you can get them from Land Transport Authority's (LTA) website.

    There will be a fee of $7.49 (including GST) for every successful search.  

    Find the best car insurance now on GoBear.com!


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    Car Insurance: A must have for every Singaporean driver

    Owning a car in Singapore is a costly affair so it would make sense to take out an insurance policy to cover that precious asset of yours.  

    There’s no one size fits all approach to car insurance. Driving with an insured car gives you peace of mind but make sure you take your time to figure out the best deal and coverage to suit your needs.

    Car insurance providers in Singapore

    Car Insurance Providers in Singapore
    AIG Aviva Direct Asia
    ERGO FWD HL Assurance
    MSIG Tiq by Etiqa Insurance Tokio Marine


    Car Insurance Singapore Reviews
    AIG Aviva AXA
    Direct Asia ERGO FWD
    HL Assurance Liberty MSIG
    NTUC Income Sompo Tiq by Etiqa Insurance


    GoBear's curated car insurance plans for your needs:

    Last update on Dec 21, 2020