What Types Of Car Insurance Coverage Are?

What types of car insurance coverage offered in Singapore? Like other countries, Singapore government makes it compulsory that every car, motorbike or van owner must insure their liabilities arising from the usage of the motor vehicles. If the motor vehicles are being bought under hire purchase then comprehensive car insurance coverage is normally required by the finance company. As the car legally belongs to the finance company, it would want the widest car insurance coverage possible. Besides it is you who are paying for the car insurance premium, not the finance company.

If the motor vehicle is not under hire purchase and the vehicle is old, you may choose to have it insured under the cheaper Third � Party Only Car Insurance policy. Cars owner doesn't usually bother to know what is his car insurance policy until an insurance claim arises. There are four main types of Car insurance coverage in Singapore. These are:

1) Act Liability Only

The law requires that you have to buy car insurance to protect any insurance claims made against you from using motor vehicle on the road. This car insurance policy covers only death or bodily injury to third partied including passengers. So if you injured someone in a car accident, then the car insurance companies will compensate the victim. However it does not cover property damage to third parties, nor does it covers bodily injuries to the cars owner or damage to the cars owner's vehicle. This car insurance policy also does not cover car accidents that happen in other places (e.g. private property), which are not included in the definition of a "road" under the Act.

Because of its very limited car insurance coverage, cars owner usually at the very least opt for the Third � Party Only Car Insurance. In fact, minimum Third � Party Only Car Insurance is a compulsory requirement for road tax renewal.

2) Third � Party Only

First we have to understand what is meant by the term �Third � Party'. You, the one buying the car insurance are the first party. The car insurance company is the second party and the third party is anybody else.

Unlike an Act Liability Only policy, Third � Party Only policy not only covers death or bodily injury to third parties including passengers, but also provides cover against damage to third-party property. However, it does not provide insurance coverage against damage to the insured's own motor vehicle. It also does not give you any insurance coverage if your car is stolen. The next type of car insurance policy that gives you more insurance coverage than Third � Party Car Insurance policy is the Third � Party, Fire And Theft Car Insurance policy.

3) Third � Party, Fire and Theft

This is an extension of the Third � Party Only Car Insurance policy in that it additionally protects the cars owner's motor vehicle against loss or damage, which may result directly from fire or theft. As the covered perils are limited to fire and theft, damage to the cars owner's motor vehicle by other peril is not covered by this car insurance policy. Hence, a cars owner who wants additional insurance coverage for his vehicle against loss or damage by other perils will have to purchase a comprehensive car insurance policy.

4) Comprehensive

This type of car insurance policy offers the broadest insurance coverage against financial loss from using a motor vehicle.

This car insurance policy not only covers the cars owner's liability for causing bodily injury (including death) or property damage to third � parties including bodily injury and death to passengers, but also covers damage to the cars owner's motor vehicle.

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