Comprehensive car insurance can be expensive. But what if you still want to cover your car for damages caused by an accidental collision? Collision-only car insurance may be the answer.
To get your car on the road in Singapore, it needs a valid road tax and car insurance that covers your legal responsibility for deaths and injuries you caused to other people (i.e., third party liability for deaths and bodily injury).
Collision-only car insurance is an excellent choice as it not only fulfills the legal requirement of third party liability coverage but also provides financial protection in case your car sustains damage in a collision accident.
In this post, we'll explain what collision-only car insurance is, outline its coverage scope, compare it to other types of coverage, and identify the drivers who would benefit from this type of coverage.
Table of contents:
- What Is Collision-Only Car Insurance?
- What Does Collision-Only Insurance Cover?
- How Is Collision-Only Insurance Different From Other Coverage Types?
- How Much Does Collision-Only Car Insurance Cost?
- Who Should Get Collision-Only Car Insurance?
- Conclusion
- FAQ
What Is Collision-Only Car Insurance?
Collision-only car insurance is a type of motor insurance that covers damage to your car due to a collision with another vehicle. This type of policy pays to repair or replace your car if it's damaged in an accident with another vehicle.
It does not cover other types of ‘Own Damage’ repairs unrelated to a vehicle crash. For example, the repairs would not be covered if you accidentally drive into a lamp post. It is because the damage was not caused by colliding with another vehicle.
What Does Collision-Only Insurance Cover?
While every car insurance policy has its unique features, collision-only insurance generally covers these common scenarios:
- Your car is damaged due to a collision with another vehicle.
- Your car catches fire as a result of an accidental collision with another vehicle.
- A hit-and-run vehicle damaged your car while it was parked.
- Your legal liability to third parties for causing their death or body injury or damage to their property.
The insurer typically can choose between repairing, reinstating, replacing, or providing a cash settlement to compensate for your financial loss.
How Is Collision-Only Insurance Different From Other Coverage Types?
In Singapore, there are three common types of car insurance coverage:
- Third Party - Covers injury or death of third parties and damage to their property resulting from an accident involving your vehicle. It does not cover damage to your own vehicle.
- Third Party, Fire and Theft - Includes Third Party coverage plus fire damage to or theft of your own vehicle.
- Comprehensive - The broadest coverage. Includes everything in Third Party, Fire and Theft plus accidental damage to your own vehicle, windscreen damage, damage from events like riots, personal accident cover, and medical expenses.
Collision-only insurance sits between Third Party and Third Party, Fire and Theft in terms of coverage scope.
It provides more coverage than Third Party by covering damage to your car when involved in an accidental collision with another vehicle. However, it has less coverage than Third Party, Fire and Theft because it does not cover your financial loss if your car is stolen or catches fire on its own.
The table below compares the coverage of collision-only car insurance with Comprehensive, Third Party, Fire and Theft, and Third Party coverage types.
|
Third Party
|
Third Party, Fire and Theft
|
Collision-Only
|
Comprehensive
|
|
|
Third party death or bodily injury
|
Yes
|
Yes
|
Yes
|
Yes
|
|
Third party property damage
|
Yes
|
Yes
|
Yes
|
Yes
|
|
Own damage - Damage to your car due to an accident.
|
No
|
No
|
Yes, only if the damage is due to a collision with another vehicle.
|
Yes
|
|
Own damage - Another car hit your car while it was parked.
|
No
|
No
|
Yes
|
Yes
|
|
Your car is damaged due to collision with an object, e.g., lamp post
|
No
|
No
|
No
|
Yes
|
|
Your car is damaged by a falling object, e.g. tree branch
|
No
|
No
|
No
|
Yes
|
|
Your car is damaged due to flood
|
No
|
No
|
No
|
Yes
|
|
Your car windscreen is damaged
|
No
|
No
|
No
|
Yes
|
|
Fire - Damage or loss to your vehicle due to fire.
|
No
|
Yes
|
Yes, only if the fire arises from a collision with another vehicle.
|
Yes
|
|
Theft - Your car is stolen
|
No
|
Yes
|
No
|
Yes
|
How Much Does Collision-Only Car Insurance Cost?
Collision-only car insurance premiums are generally lower than comprehensive coverage. Premiums are based on factors like your car's make and model, driving experience, NCD, and excess amount.
For example, collision-only coverage for a standard sedan with 50% NCD may cost around S$840 annually. A comprehensive policy for the same driver and car would cost approximately S$880 per year.
Who Should Get Collision-Only Car Insurance?
Collision-only car insurance can be a good option for drivers looking to pay lower premiums while still having protection for their vehicle.
Unlike Third Party coverage, which only covers damage to other parties, collision-only car insurance will pay for your car’s repair costs if it is damaged in an accident involving another vehicle.
It is suitable for most drivers since an accident can potentially lead to a total loss of the car (i.e., the vehicle is damaged beyond economical repair). With this coverage, you can minimise your financial loss and recover the current market value of your car, including any remaining COE and PARF value, if it is declared a total loss after an accident.
However, it's important to note that collision-only car insurance does not cover damage caused by non-vehicle collision incidents, such as you accidentally reversing your car into a wall or damage from weather events like floods. You would need to pay out-of-pocket for repairs in these scenarios.
Conclusion
Collision-only car insurance provides a middle ground between basic Third Party coverage and Comprehensive insurance.
It covers damage to your own vehicle resulting from an accident while meeting Singapore's legal requirements on coverage for third-party bodily injury and deaths. It protects against huge repair bills when your car is damaged in a crash.
If you are comfortable paying for the repair costs of all non-collision damages, collision-only car insurance is a great option at lower premiums.
However, it's important to consider your risk appetite and the value of your vehicle before opting for this limited coverage. Comprehensive insurance is still highly recommended for brand-new cars and luxury vehicles.
Ultimately, analyse your driving habits, risk factors, and the depreciating value of your car over time. This will give you clarity on the appropriate coverage you need.
FAQ
When do you not need collision-only car insurance?
You may not need collision-only car insurance if you own an older vehicle that has depreciated significantly.
In Singapore, cars on their second Certificate of Entitlement (COE) cycle do not have a Preferential Additional Registration Fee (PARF) value left. Their market value mainly comprises the remaining COE value.
For such cars, especially in the last few years of their COE, the insurance payout may not be significant, even if they suffer a total loss in an accident. Hence, not having collision coverage may be an acceptable risk.
However, it still depends on your specific circumstances. You should compare potential repair costs and your risk appetite versus the insurance premium of collision-only car insurance.
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