Between TPO, TPFT and Comprehensive, what does each of the three categories of car insurance cover, and which one should you pick?
It’s common knowledge that car insurance is mandatory for driving in Singapore. And the authorities are pretty serious about it too.
According to the Land Transport Authority, getting caught driving without proper car insurance can see you slapped with a fine of up to $1,000, a jail term up to three months or both. That’s on top of a mandatory debarment from driving for at least 12 months.
The requirement for motor insurance stems from the ruinous potential a serious traffic accident can have on the lives of the victims – not only for you, the driver, but also for your fellow passengers, road-users and pedestrians.
As such, the minimum level of coverage mandated by law is focused on financial restitution for whichever poor soul your car runs over. In other words, the authorities are only concerned with your ability to pick up the bill in case of a traffic accident.
But it’s not that the government doesn’t care about drivers – it has simply chosen not to absorb the costs of traffic accidents, spreading it around in the form of higher taxes.
With that said, let’s take a look at the types of car insurance plans in Singapore, what they actually cover, and which one you should get.
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Car insurance comes in three categories
|Type of car insurance||What it covers|
|Third-party only (TPO)||– Bodily injury to third parties- Property damage to third parties|
|Third-party, fire and theft (TPFT)||– Bodily injury to third parties- Property damage to third parties- Loss of vehicle due to fire or theft|
|Comprehensive||– Bodily injury to third parties- Property damage to third parties- Loss of vehicle due to fire or theft- Accidental damage to vehicle- WIndscreen damage- Medical benefits for driver- Personal accident benefits driver|
|Optional add-ons||– Damage to vehicle from other causes- Liability cover for passengers- Personal accident cover for passengers- Medical expenses for passengers – No-Claim Discount- Cover for personal belongings or car accessories- Others as specified|
Third-party only (TPO)
Third-party only (TPO) car insurance is the minimum level of insurance required to satisfy the legal requirements for driving on Singapore’s roads.
This category of plans only covers your liabilities to any third parties that suffer bodily injury or property damage caused by you driving your vehicle, and nothing else beyond that.
Because this coverage is so barebones, TPO plans cost very little, but that’s the only good thing about it.
Who should get a TPO plan
Obviously, TPO plans are not a great choice for the vast majority of drivers.
You’re basically driving around without any cover, and will have to pay out of pocket for anything that happens to your vehicle – whether it be a windscreen crack, or the cost or replacing your bumper from getting rammed from behind (as well as the doctor’s bill for the resulting whiplash to your neck).
TPO plans should only be considered if:
- You only want to fulfil the barest minimum of legal requirements for driving
- You drive your car extremely rarely, and even then, only at low speeds and on minor roads
- You will not be affected if you lose your car
- You are planning to get rid of your car really, really soon
Third-party, fire and theft (TPFT)
The second category of motor insurance is known as third-party, fire and theft (TPFT), and while it may be a step up from TPO plans, it is still vastly insufficient for the average driver.
As its name suggests, a TPFT motor plan covers you against liabilities to third parties, as well as loss of your vehicle due to fire or theft.
There is no cover against accidental damage to your vehicle, which means if you mount the kerb and scratch up your paintwork on the neighbour’s front gate, you still won’t be able to claim for your repair bill (although your neighbour can enjoy a brand new gate, paid for by your insurer).
You can expect TPFT plans to cost slightly more than TPO plans, but the difference is unlikely to be very much.
Who should get a TPFT plan
As stated, TPFT plans are unlikely to be a suitable option for the average driver. There is no cover offered for you and your passengers, which, don’t forget, are also at risk of serious injuries or fatality in an accident.
TPFT plans are only situationally useful, and might be suitable for:
- Car owners who leave their cars for long stretches of time at public parking facilities
- Drivers who regularly drive into areas with high risk of car theft
- Owners of older vehicles who are planning to scrap their vehicle soon
- Drivers who are willing to bear the costs of minor to moderate damage to their cars
Lastly, we have what is known as Comprehensive car insurance, which is what most car drivers should be considering.
This is because out of the three categories of plans, only a Comprehensive car insurance plan will include you and your passengers as parties to be covered in the event of a traffic accident.
In addition to the benefits offered by TPO and TPFT plans, Comprehensive plans also provide coverage for accidental damage to your vehicle, personal accident benefits and medical expenses.
Other benefits typically included are windscreen repairs, and vehicle damage not caused by traffic accidents.
Who should get a Comprehensive plan
Given the cost of medical treatment, and the exorbitant prices of private cars, a Comprehensive motor insurance plan should be the default option for drivers in Singapore.
Indeed, this is the most common type of car insurance plan offered in the market, although some insurers may further split up their offerings by including additional perks and benefits.
Given the wide variety of Comprehensive car insurance plans available, you should take your time to pick one that best matches your needs and budget.
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What about optional add-ons
Insurers also offer extra benefits and perks as optional add-ons that can extend the utility of your auto insurance plan. This will vary between providers, and can range from quality-of-life improvements such as child car seat protectors, to personal accident coverage for your passengers.
Of course, add-ons can have a significant impact on the premiums charged to your plans, especially if they involve high sums assured.
You may be wondering if you can cheap out and get a TPO or TPFT plan, and use add-ons for a minimum margin of coverage.
Well, that is a discussion you’ll need to have with your insurer, but it is entirely possible that certain add-ons may be restricted to Comprehensive plans only.
Our advice is to go for a full-fledged plan, and strive not to get into any accidents to build up your No-Claims Discount, which can cut your car insurance premiums by as much as 50%.
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By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.