Financial Quotient

What is comprehensive motor cover?

WHAT DOES IT MEAN?

Three main types of motor vehicle insurance policies are sold in Singapore. Of the three, the comprehensive cover offers the broadest protection. It covers the policyholder if he causes bodily injury and death to other parties, including his passengers, as well as property damage.

It also covers damage to the insured's vehicle and others that he uses with the permission of the owners. You can also extend your motor plan to cover authorised drivers. Also, most insurers cover medical expenses and pay a death benefit if the insured person dies in a car accident.

The other two types of policies are third-party only (covering death or bodily injury to third parties as well as damage to their property); and third party, fire and theft, in which cover is extended to protect the insured's own vehicle for damage resulting from fire or theft.

WHY IS IT SIGNIFICANT?

It is compulsory for a vehicle owner to buy motor insurance. If you own a new car, you would be advised to buy comprehensive cover. If your vehicle is an old one, the insurer may offer only third party, or third party, fire and theft.

With comprehensive insurance, you can claim for accidents deemed to be your fault. It also applies when fault cannot be proven. Without such cover, you may have to pay for repairs. And if your car is written off, you will have to pay for a new one.

It offers peace of mind that you can avoid paying for expensive repairs. However, do note that you will likely have to pay for the excess, which is the amount borne by the driver in the event of a claim.

IF YOU WANT TO USE THE TERM, JUST SAY:

"The comprehensive motor insurance that I recently bought for my new car includes cover for medical expenses up to $300."

Lorna Tan

A version of this article appeared in the print edition of The Sunday Times on November 11, 2018, with the headline 'What is comprehensive motor cover?'. Print Edition | Subscribe