Third-Party (TPO & TPFT) vs Comprehensive Car Insurance: Which is Best for Cars in Singapore?

It’s common knowledge that car insurance is mandatory for driving in Singapore and getting caught driving without proper car insurance can see you slapped with a fine of up to $1,000, a jail term of 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, as the main concern is your ability to pick up the bill in case of a traffic accident.

With that, let’s dive deeper into the types of car insurance plans in Singapore: Third-party only (TPO), Third-party fire and theft (TPFT), and Comprehensive. We’ll explore what third-party insurance is and how much each type of third-party car insurance covers to help you figure out what plan you’ll need.

Related to this topic:

Singtel Car Protect Review: Straightforward and Affordable Car Insurance Plan

AIG Car Insurance Review (2022): Lean-but-Robust Car Insurance

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. Here are three key factors to help you determine if a TPO insurance plan is suitable for you:

If you're a new or less experienced driver, opting for a more comprehensive plan might be a safer choice. New drivers are statistically more likely to be involved in accidents, and a comprehensive plan will offer greater financial protection in such situations. However, if you're a seasoned driver with a clean driving record and confident in your skills, a TPO plan could be enough.

The age and market value of your car play a significant role in deciding if TPO is appropriate. For cars with lower market values, a TPO plan might be a cost-effective option. This is because the potential repair or replacement costs in case of an accident are likely to be lower. However, if you own a new or high-value vehicle, a more comprehensive plan is usually recommended to better protect your investment.

If you're a daily commuter who spends a significant amount of time on the road, a more comprehensive plan might offer better peace of mind. However, if you use your car infrequently or mainly for short trips, a TPO plan might be sufficient for your needs.

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 of replacing your bumper from getting rammed from behind (as well as the doctor’s bill for the resulting whiplash to your neck).

Ultimately, 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

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 the 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 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 insurance plans, but the difference is unlikely to be very much. Here are other factors to help you determine if a TPFT plan could be suitable for you:

While TPFT offers more coverage than TPO, if you're a less experienced driver or have a less-than-perfect driving record, it might be better to consider a more comprehensive plan. It can provide wider protection for a broader range of incidents that might be more likely to occur with less driving experience. However, if you're a confident driver with a good track record, TPFT could be a good balance of cost and coverage.

TPFT is often a good fit for those with older cars or vehicles with lower market values. This type of plan offers protection against fire and theft, which can be significant risks even for older cars. However, if your car is relatively new or has a high market value, a more comprehensive plan might be a better investment to cover potential repair or replacement costs in case of an accident.

Think about where you usually park your car. If you frequently park in areas with higher risks of fire or theft, such as public car parks, TPFT can provide valuable protection. Conversely, if your car is typically parked in a secure location like a private garage, and you're mainly concerned about liability coverage, a TPO plan might suffice. However, if you're looking for more comprehensive coverage without the higher cost of a full comprehensive plan, TPFT offers a good middle ground.

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 a 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. But what is Comprehensive car insurance, exactly, and why is it the most preferred? It's essentially the most complete car insurance plan available, offering the widest range of coverage and benefits.

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.

Here are three things to take note of before deciding on a Comprehensive car insurance plan:

While all drivers can benefit from the extensive coverage of a Comprehensive insurance plan, it's especially recommended for new or less experienced drivers.

Comprehensive plans offer the highest level of protection, covering not only third-party liabilities but also damage to your own vehicle, medical expenses, and other benefits. This can provide valuable peace of mind for those who are still developing their driving skills and might be more prone to accidents.

Comprehensive car insurance is often considered essential for new or high-value vehicles. This is because the potential repair or replacement costs for such vehicles can be substantial in case of an accident, theft, or fire. A comprehensive plan provides financial protection against these risks, ensuring that you're not left with a hefty bill if the unexpected happens.

If you're a frequent driver who relies heavily on your car for daily commutes or long journeys, a comprehensive plan is highly recommended. A comprehensive plan offers the most extensive coverage, protecting you financially in a wide range of situations, from minor fender-benders to major accidents.

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.

Related to this topic:

Best Car Loans in Singapore: Interest Rate And Features Comparison

Is S$0 Down Payment Car Purchase A Good Idea?

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%.

Before you purchase car insurance, it's crucial to consider the total cost involved. After all, getting a car in Singapore is already a significant investment, and if you get into an accident, it can be very costly without the right insurance. Here are the two main things to consider:

When it comes to types of car insurance, the premiums can vary significantly depending on the level of coverage you choose. As you might expect, TPO plans generally have the lowest premiums, as they offer the most basic coverage. TPFT plans fall in the middle, providing more coverage than TPO but at a higher cost.

Comprehensive plans, which offer the most extensive coverage, typically have the highest premiums. The difference in premiums between these types of car insurance reflects the level of risk the insurer takes on.

It's essential to weigh the cost of premiums against the level of coverage provided. While it might be tempting to opt for the cheapest option, remember that how much third-party car insurance covers is limited. If you require more extensive protection, the higher premiums of a comprehensive plan might be a worthwhile investment.

As mentioned above, several factors can influence your car insurance premiums, regardless of the type of coverage you choose. These include your age, driving experience, the type of vehicle you drive, and your usage patterns. Younger, less experienced drivers with high-performance vehicles and frequent usage typically face higher premiums due to the increased risk they represent to insurers.

This is probably the biggest question on your mind. As you can probably conclude by now, the "best" car insurance truly depends on your individual needs and risk level. Whether you’re getting a new policy or renewing an existing one, you can best decide what is the best third-party insurance plan for you by:

Carefully consider your driving habits, the age and value of your car, your budget, and your risk tolerance. This will help you narrow down the options and choose a plan that provides adequate coverage without breaking the bank.

If you’d like to, you can even reach out to insurance providers to discuss your needs and get quotes for different plans. They can provide personalised advice and help you understand the nuances of each policy, ensuring you make an informed decision.