Motor Car Insurance

Dear Mr. Tan,

What are the types of insurance that I can buy to insure my motor car? What is the difference in the premium payable? What is excess and no-claim discount?

REPLY

You have three options to insure your car:

1) comprehensive
2) third party, fire and theft (TPFT)
3) third party only (TPO)

There are three main types of losses covered by a motor insurance policy:

a) damage to your car caused by accidents
b) loss of your car due to fire and theft
c) liability to third party for an accident caused by you.

The comprehensive policy covers (a), (b) and (c). The TPFT policy covers (b) and (c) only. The TPO policy covers (c) only.

Most owners insure their cars under comprehensive cover. If the car is old and has small market value, they may insure under TPFT or TPO cover.

The premium payable on a car depends on a few factors. The premium for TPFT and TPO covers are about 65% and 50% of the comprehensive premium.

The "excess" is the amount that you have to co-pay for any claim. The insurance company will pay the amount that is above the "excess".

The owner enjoys a no-claim discount if there is no claim during the year. The discount starts at 10% after one year, and increases by another 10% for each subsequent year, until it reaches 50%. If there is a claim, the discount is reduced by 30% or goes back to 0%.

For more details:
http://www.tankinlian.com/faq/car.html