6 Factors To Consider When Buying Motor Insurance As A First-Time Car Owner

This article was written in collaboration with MSIG. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

For those thinking of owning a car for the first time, it’s important to remember that motor insurance is compulsory in Singapore and that you need to buy it before you can legally drive on the road. Similar to choosing a maid or home content insurance, there are different types of motor insurance policies that you can choose from.

As Singapore is one of the most expensive countries in the world to buy a car, getting the right motor insurance policies that provide comprehensive coverage for our cars in the event of unfortunate accidents is extremely important.

If you are a car owner, here are 6 factors you should consider when buying a motor insurance policy.

#1 Different Types Of Motor Insurance Policies

As explained by General Insurance Association (GIA) Singapore, there are three types of motor insurance policies that you can purchase in Singapore. They are 1) Third-party, 2) Third-party, fire and theft and 3) Comprehensive.

Third-party motor insurance is the bare minimum type of insurance policy that you need in Singapore. These types of insurance policies cover death or injury to other parties, as well as damages to other parties’ properties. However, do note that it does not cover your own car.

This means that if your car is damaged in an accident (or through any other scenarios) and you are found liable for the damage, you cannot claim against your own policy and have to pay for the damages yourself.

Third-party, fire and theft motor insurance is similar to third-party motor insurance. The main difference here is that you also enjoy coverage for your car if it is being damaged by fire or theft.

Comprehensive motor insurance coverage is what we think many first-time car owners should ideally be opting for. It covers all third-party claims, as well as damages to your own car. With these types of insurance policies, you are buying coverage that protects you from potential third-party liabilities and also any damages incurred on your own car.

#2 Choice Of Workshops

In our view, this is one of the most important factors to consider when buying motor insurance policies – the workshops that you can go to repair your car.

There is a high chance that you would purchase a new or pre-owned car from a reputable dealer that you trust. If you prefer to send your car to your preferred workshop for regular servicing and repair due to an accident, you need to factor that into your purchase consideration.

As such, you would want to get a motor insurance policy that allows you to go to any car workshop.

For example, with MSIG’s MotorMax Plus, you have the freedom to send your car to any workshop of your choice for repair, including workshops by the manufacturer’s agent in Singapore. It is valuable, especially for first-time car owners who may not know of any trusted workshops. In such instances, going back to the manufacturer’s agent is likely to be the best option, so you want to ensure that your motor insurance policy covers this.

As a bonus, if the repair for your insured car takes more than 3 days, MotorMax Plus will also provide a transport allowance of $50 per day, up to a maximum of 10 days. So if the duration for the repair of your car takes 5 days, you will receive $250 in transport allowance.

#3 24/7 Roadside Assistance

If you have driven long enough, there is a fairly good chance that you may encounter a car breakdown while you are on the road. Unless you are highly proficient with fixing a car with minimal tools, you will most likely require roadside assistance. Alternatively, in an accident, you may need help towing your car to the workshop.

A piece of good news is that many insurers in Singapore provide roadside support to their customers. For example, MSIG offers customers 24/7 roadside assistance such as emergency towing, vehicles, locksmith referrals and other support areas.

As a motor insurance policyholder, check the level of support that your insurer can provide in the event of a breakdown or accident, and make sure they are on your dial list so you can easily reach them if the need ever arises.

#4 New For Old Replacement

While the general idea of having a comprehensive motor insurance policy is to cover the cost of repairing a damaged car, there may be occasions where this is not possible if the car is involved in a terrible accident or has caught fire. Insurers term this as a total loss.

In cases of a total loss, insurers would usually pay out the car’s market value. However, for newer cars (e.g. cars that are younger than 12 months), the insurer may offer the option of a new for old replacement.

A new for old replacement allows you to get a new car (same make, model, engine capacity) in the event of a total loss. For MSIG’s MotorMax Plus, this is up to $100,000 above the market value of the insured vehicle. This applies to cars that suffered a total loss within 12 months of their first registration.

#5 Car Loan Protection For Policyholder

Many of us would take a loan to finance the purchase of our car. We need to pay a monthly instalment to service this loan.

In the unfortunate event that the car policyholder passes on due to an accident, the car becomes a financial liability to the surviving family members. Some motor insurance policies include car loan protection of up to $100,000 to policyholders that allow paying the outstanding loan amount for the insured vehicle. This benefit applies if the policyholder passes on due to an accidental death connected to the insured vehicle.

If you have an existing car loan, it’s worth considering whether car loan protection is a criterion that you want for your motor insurance policies.

#6 Medical Expense Coverage

Thus far, most of what we have discussed has to do with protecting the car. However, motor insurance policies can also provide financial protection for drivers and passengers in the event of injuries caused by accidents.

In the unfortunate event of an accident, medical expenses could be incurred. These may be injuries that do not require any hospitalisation or surgery (thankfully), but may still need to require medical treatment.

If you are buying a motor insurance policy, check the level of medical expense coverage that you are entitled to. For example, MotorMax Plus provides the policyholder, authorized driver and any passengers in the car, up to the legal seating capacity, a medical expense claim of up to $1,000 each.

The Claim Process Matters As Well

MSIG adopts technological means to make the claim process more convenient and efficient. For a start, MSIG provides a quicker repair approval with their video interaction technology that allows an off-site surveyor to assess and approve your car repair virtually. Claims are also made easy with dedicated officers handling the claims.

At the same time, if you are unsure of any matters pertaining to the motor insurance plans (MotorMax or MotorMax Plus) that you have bought from MSIG, there is also a live chat function available on the MSIG website where you can speak to the team from 8:45am to 5:15pm, Mondays to Friday (except public holidays). Alternatively, you can also have your questions directed to Mae – MSIG chatbot – that will be available for general enquiries on MSIG products.

If you are looking for motor insurance coverage, you can find out more about how MSIG’s MotorMax Plus can cover you and your car financially for any unforeseen circumstances. Plus, from now to 23 January 2022, get up to $150 vouchers and $150 car grooming vouchers when you get MotorMax Plus.

Read Also: Cost Of Owning A Car In Singapore Over 10 Years