Navigating car insurance requirements in Singapore can be challenging, especially for those unfamiliar with the laws and regulations. Whether you’re a first-time car owner or need a refresher, it’s essential to understand the rules that govern car insurance Singapore to avoid fines, legal issues, or worse, being unprotected when you need it most.
This blog will provide you with a comprehensive guide to 12 key laws about car insurance in Singapore. By the end of this post, you’ll not only understand your obligations but also uncover tips on choosing the right coverage for your needs.
Why Car Insurance Is Mandatory in Singapore
Singapore’s legal framework requires all motor vehicle owners to carry valid car insurance. This mandate protects not only drivers but also passengers, pedestrians, and other road users. Driving without valid insurance isn’t just risky; it’s illegal and can result in fines or imprisonment.
Under the Motor Vehicles (Third-Party Risks and Compensation) Act, private car owners must carry at least third-party liability insurance. This ensures that anyone harmed in an accident caused by your vehicle receives due compensation. However, the specifics of coverage and the laws surrounding car insurance go well beyond this basic requirement.
Now, let’s take a closer look at 12 crucial car insurance laws every driver in Singapore should be aware of.
1. Car Insurance Is Mandatory for All Vehicles
Every motor vehicle on Singapore’s roads, regardless of its type, must have valid car insurance. This includes both private and commercial vehicles. Failure to secure insurance will result in heavy penalties, including fines of up to S$1,000, license suspension, or imprisonment for up to three months.
Make sure your insurance coverage is active and renewed annually before the expiration date.
2. Minimum Requirement: Third-Party Liability Insurance
Singapore law requires all car owners to carry at least third-party liability coverage. This type of insurance covers damage and injuries to third parties if you are at fault in an accident. It does not, however, cover damages to your own vehicle.
For broader protection, consider upgrading to comprehensive insurance, which also covers your car’s damages, theft, and more.
3. New Drivers Face Higher Premiums
If you hold a recently-issued license, be prepared for higher premiums. Insurers in Singapore commonly view new drivers as high-risk due to their lack of experience on the road. Car insurance laws allow insurers to charge higher rates that reflect this increased risk.
One way to lower premiums is to maintain a clean, accident-free record over several years.
4. Car Modifications May Affect Your Insurance
Planning to add custom ringtones to your car horn or upgrade the engine for additional horsepower? Think twice! Any modifications to your car must be declared in advance to your insurer. Certain changes can void your policy or lead to a denial of claims if not disclosed.
Always check with your insurer before making changes to your vehicle to ensure compliance with the law.
5. No Claim Discount (NCD) Is Protected by Law
The No Claim Discount (NCD) allows safe drivers to enjoy a discount on their renewed premiums. NCD rewards those who do not make any claims during their policy period, with savings anywhere from 10% to 50%, depending on the insurer.
You can also opt for an NCD protector add-on, which safeguards this discount even if you make a claim.
6. Drink Driving Is a Sure Way to Nullify Coverage
Driving under the influence is a serious offense in Singapore. Not only does it put lives at risk, but it also voids your car insurance policy. Any claims resulting from accidents caused by drink-driving will be rejected, leaving you financially liable for damages.
Stay responsibility behind the wheel by avoiding alcohol if you plan to drive.
7. Drivers Below 26 Pay Higher Premiums
Drivers under 26 are classified as high-risk by insurers in Singapore. Specific laws permit insurers to impose “young-driver surcharges” on these policies. Premiums are especially high for sports car owners in this category.
8. Claims Must Be Filed Within the Required Time
If you’re involved in an accident, reporting it to your insurer within the stipulated time frame is not just advisable; it’s legally mandatory. Failing to do so could result in your claim being rejected.
Most policies require you to provide a report within 24 hours or by the next working day after the accident.
9. Doing Private Hire or Delivery Requires a Special Policy
If you’re thinking about using your car for private-hire services (like Grab or Gojek) or deliveries, your standard car insurance policy won’t suffice. Singapore law requires you to purchase a commercial usage policy for this type of work.
Driving for hire without proper coverage can void your insurance, leaving you unprotected in the event of an incident.
10. Insurance Follows the Car, Not the Driver
A common misconception about vehicle insurance in Singapore is that it covers drivers. Instead, car insurance is tied to the vehicle itself. This means that as long as other users have your consent to drive the car, they are covered under your policy.
However, some policies may restrict coverage to named drivers only. Review your policy details carefully.
11. Illegal Street Racing Voids Insurance
Engaging in illegal racing or reckless driving is not only against the law but will also lead to an automatic cancellation of your insurance policies. If you’re involved in this kind of driving and are caught, you forfeit all claims, leaving you to face the consequences on your own.
12. Foreign Drivers Need Special Coverage
Are you a foreigner driving a car in Singapore? Make sure your existing car insurance policy is recognized locally. Many expats opt to secure local car insurance policies to avoid complications while driving in Singapore.
Speak with your insurer to confirm compliance before taking the wheel.
Protect Yourself on the Road
Understanding the laws governing car insurance is crucial for every driver in Singapore. With penalties for non-compliance ranging from waived claims to heavy fines or even imprisonment, staying compliant isn’t just a legal necessity but a financial safeguard.
To avoid future complications, always:
- Renew your policy before it expires.
- Clearly declare any modifications to your car.
- Report accidents promptly and adhere to filing requirements.
- Select the right policy type based on your usage needs.
Looking for expert advice or overwhelmed by options? Consider consulting a trusted agent at Motorist to guide you toward the right motor insurance plan for your unique needs.
