Are you deciding between comprehensive or third-party car insurance plans? Here is a complete guide on the 3 main types of car insurance coverage & how they will protect you.
There are three types of car insurance plans in Singapore and here’s all you need to know about them – consider this a crash course, beginners!
The three types of car insurance plans are:
- Third-Party Only (TPO)
- Third-Party, Fire, and theft (TPFT)
- Comprehensive
We’ll break down each car insurance plan so you’ll know what’s the best plan for you and how they may best suit your needs.
Third-Party Only (TPO) plan
TPO offers drivers the most basic car insurance coverage. It’s a liabilities coverage that only protects affected third parties – like an injured pedestrian or the damaged guard rails – that’s been proven to be your fault.
It protects external “third-parties”, but not you and your car. You won’t receive a payout from your insurer under TPO.
Should you get TPO car insurance?
TPO car insurance coverage type is the bare minimum required in Singapore. TPO car insurance would be ideal if:
- You’re willing to take high financial risks and pay for your own damages
- You barely use your car (to the extent it’s rarely on the roads)
- Losing your car in an accident won’t drastically affect your way of life
- You only need basic protection for liability against any third-parties bodily injuries or property damage
- Your vehicle is an overused, second-hand car that you’re planning to get rid of soon that does not need extra coverage from TPFT and Comprehensive car insurance plans
Third-party, fire, and theft (TPFT) plan
On top of covering liabilities, TPFT car insurance also covers any loss or damage caused by fire or theft. Other causes that have indirectly resulted in loss or damage (like bird shit corroding your paintwork), to your insured vehicle, will not be covered.
Should you get TPFT car insurance?
Since it covers more than TPO, it’ll be more expensive. You should get TPFT if you’re willing to pay more and:
- You want to avoid paying out-of-pocket expenses for losing the whole car.
- You’re still willing to take some financial risk by paying for minor accidents.
- You’re driving into countries with high crime rates of fire, arson, and theft (not going to mention names), but you know, I know can already.
- Your vehicle is old, does not require comprehensive car insurance but still needs more than just liabilities coverage.
Comprehensive plan
Comprehensive car insurance includes the benefits of TPO, TPFT, and accidental damage to the car – even those by natural disasters or self-imposed.
Besides offering personal accident benefits, it also covers other medical expenses for the passengers on-board.
Should you get comprehensive car insurance?
If you’re taking a bank loan for your car, comprehensive car insurance is a must because it acts as collateral for banks. That aside, getting comprehensive car insurance is a good idea if:
- You want to minimize your financial risks because you only need to pay a partial sum for the damages (before your insurers handle the rest)
- Your car, being used to commute for work, is always on the roads and would require a replacement if it is sent for repair
- You’re not the most experienced (and safest) driver
- Your car is brand new, has a high value, and/or is a luxury car that will cost a lot to repair
Should you get a TPO, TPFT, or Comprehensive car insurance plan?
While all the information might be overwhelming, in summary, the breakdown of the plans are as follows:
- TPO only covers your third-party liabilities
- TPFT covers your third-party liabilities and the loss of your car in fire or theft
- Comprehensive covers you, your vehicle, your passengers, and your liabilities in minor and grave accidents
Deciding on which plan boils down to – “how much of a risk-taker are you?”
Insurance Market offers a wide range of general insurance products (such as Travel Insurance, Maid Insurance, Pet Insurance, and more) online and life insurance through personal advice from our qualified brokers. Please contact us at [email protected] or +65 69081811 if you have any questions.
