How to choose the best car insurance policy in Singapore

In Singapore, car insurance is a legal necessity—but how you choose your policy isn’t just about ticking the regulatory box. While most drivers naturally gravitate toward the lowest premiums, this instinct can come at a cost: a more expensive excess, narrower coverage, or even slow claims processing when it matters most.

So what does “value” in a car insurance policy really look like in practice? It starts by understanding what the policy actually covers, what it leaves out, and how the insurer supports you in the moments that count—namely, after an accident or during a major claim.

Let’s break down what drivers should know about choosing the best car insurance policy in Singapore—not just by price, but by protection, reliability, and long-term planning.

Under the Motor Vehicles (Third-Party Risks and Compensation) Act, all car owners in Singapore must have insurance that covers third-party liabilities. This is the minimum legal requirement—but it's also the bare minimum of protection. Most drivers choose comprehensive coverage, which extends beyond third-party injury and property damage to include your own vehicle. But not all comprehensive policies are equal.

Here’s where the trade-offs begin to surface:

• A cheaper policy may not cover natural disasters like flooding or fallen tree damage.
• Some policies impose high excess (the amount you must pay out of pocket before coverage kicks in) for young or new drivers.
• Many exclude coverage if repairs are done at a non-authorised workshop—even if the workshop is reputable.

So while the word “comprehensive” might sound reassuring, what’s included can vary widely depending on the insurer and your chosen tier of coverage.

Excess is one of the most overlooked policy features—yet it can determine how painful an accident feels financially. For example, two policies might both offer coverage for accident repairs, but:

• Policy A has a $300 excess
• Policy B has a $2,500 excess

If your damage claim is $2,200, Policy B pays out nothing. You bear the full cost.

Moreover, insurers often apply variable excesses depending on who’s driving the car. If you let a younger sibling borrow your vehicle, some policies impose an additional excess of $2,000 or more for under-27s or inexperienced drivers—even if they’re named on the policy.

It’s also common to see “Unnamed Driver Excess” clauses. If your friend borrows the car and crashes, the excess could jump from $600 to $2,500 simply because they weren’t listed. Choosing a lower premium might come with these hidden costs. That’s why assessing excess terms—especially for multi-driver households—is as important as the base premium itself.

Some insurers offer a lower premium in exchange for restricting repair work to a panel of authorised workshops. On paper, this creates pricing discipline and ensures standardised service.

But there’s a tradeoff: if your preferred workshop isn’t on the list—or if you’re far from panel workshops when an accident occurs—you may face longer wait times or be unable to use a shop you trust.

On the other hand, any-workshop policies provide greater freedom but often come with higher premiums or stricter claims processing.

So what’s the right balance?

• For newer vehicles under warranty, authorised workshops might be safer to preserve resale value and alignment with manufacturer standards.
• For older vehicles, the ability to use a trusted non-panel mechanic may provide better continuity and cost control—especially if you already have a relationship with one.

Either way, workshop flexibility is not just a convenience—it’s part of how you experience the insurer's service when it matters most.

Most car insurers in Singapore offer optional add-on benefits—also known as “riders”—for an extra fee. While not essential, some of these features can deliver significant value depending on your driving habits and risk profile.

Here are a few to consider:

• Loss of Use Coverage: Offers daily compensation or a replacement vehicle while your car is under repair.
• 24/7 Accident Assistance: Ensures faster roadside support and coordination with workshop and towing services.
• Personal Accident Coverage: Provides additional payout for driver injury or disability, separate from the vehicle repair.
• NCD Protector: Preserves your No-Claim Discount even after an at-fault accident—especially valuable if you’ve built up a 40% or 50% NCD.

These add-ons vary in cost and scope, but for frequent drivers or those with dependents, the incremental premiums may be well worth the peace of mind they provide.

A key aspect often overlooked is how insurers actually handle claims. Insurers may appear similar in terms of policy features, but their service levels—especially during high-pressure situations—can diverge sharply.

Consider these real differences:

• Digital-first claims platforms allow for faster processing, photo-based assessments, and less paperwork.
• Some insurers offer same-day assessments, while others might take up to 3–5 working days.
• Dispute resolution and transparency in repair cost approval can vary—impacting how quickly your vehicle gets back on the road.

Checking insurer reviews, claims turnaround benchmarks, and customer service response times can be as important as comparing policy PDFs. After all, no one thinks about claims—until they need one.

Singapore’s No-Claim Discount (NCD) is a key lever in determining your annual premium. The longer you go without a claim, the higher your NCD—up to a 50% discount off base premiums.

But NCDs are insurer-specific, and the way they treat NCD transfer or protection varies:

• You generally can’t transfer NCDs across drivers, even within the same household.
• If you switch insurers, your NCD level is usually preserved, but terms for NCD Protector riders may differ.
• A single at-fault accident can drop you from 50% to 20%, resulting in hundreds of dollars in annual premium loss.

So for safe drivers, it’s worth paying slightly more for an NCD Protector, especially in years where your driving frequency increases or your vehicle is shared.

Compared to countries like the UK or Australia, car insurance in Singapore operates within tighter geographic and regulatory constraints.

• Driving distances are short, which reduces risk exposure compared to sprawling markets.
• The Land Transport Authority (LTA) tightly regulates vehicle ownership and COE renewal, which affects the average age and value of cars insured.
• Medical costs for accident victims are covered by other schemes like MediShield, limiting the scope of liability claims compared to jurisdictions without national healthcare.

However, insurers here still compete on similar axes: price, workshop access, and digital claims tools. What’s unique in Singapore is how car insurance interacts with the COE system—older vehicles nearing the end of their COE cycle may see coverage limitations or higher premiums.

So how should drivers actually decide?

Here’s a simple planning lens:

1. Assess Your Usage: If you drive daily or on expressways frequently, comprehensive protection and fast claims matter more.
2. Think in Scenarios: Could someone else be driving your car? Is it parked in a flood-prone area?
3. Weigh Total Cost vs. Repair Risk: A $100 savings in premium may expose you to thousands in excess if you misread the fine print.
4. Look at the Lifecycle: Is your car 1 year old or 9? Coverage needs shift as vehicle value and COE horizon change.

And finally: treat your insurance choice as part of your financial protection strategy, not just a regulatory obligation. The cheapest policy might cost more in real terms the moment something goes wrong.

In the end, car insurance is a financial cushion—not just a compliance document. Choosing a policy is not about finding the cheapest deal. It’s about ensuring the right support when it matters, with terms you can count on in high-stress moments.

So yes, compare premiums. But compare them in context—with eyes wide open to excess, exclusions, and the claims process behind the brochure. Because value isn’t just a number. It’s how you’re treated when things go off course.