PGI Motor Insurance — Questions and Answers
Question 1: What are the three types of motor insurance coverage available in Singapore?
- Basic, Standard, Premium
- Third-Party Only, Third-Party Fire and Theft, and Comprehensive (Correct answer)
- Minimum, Medium, Maximum
- Liability, Collision, Full
Correct answer: Third-Party Only, Third-Party Fire and Theft, and Comprehensive
Singapore motor insurance comes in three tiers: Third-Party Only (minimum legal requirement), Third-Party Fire and Theft (adds fire and theft coverage), and Comprehensive (covers own damage as well).
Question 2: What is the No Claim Discount (NCD) system in Singapore motor insurance?
- A loyalty programme for repeat customers
- A discount on premiums for each year without claims, starting at 10% and increasing to a maximum of 50% after 5 claim-free years (Correct answer)
- A discount for paying premiums annually
- A discount for older vehicles
Correct answer: A discount on premiums for each year without claims, starting at 10% and increasing to a maximum of 50% after 5 claim-free years
NCD rewards safe drivers: 10% after 1 year without claims, 20% after 2 years, 30% after 3 years, 40% after 4 years, and the maximum 50% after 5 consecutive claim-free years.
Question 3: What is the 'excess' amount in a Singapore motor insurance policy?
- The maximum claim amount
- The first portion of each claim that the policyholder must pay out of pocket before the insurer pays the rest (Correct answer)
- The premium surcharge for high-risk drivers
- The amount refunded at policy end
Correct answer: The first portion of each claim that the policyholder must pay out of pocket before the insurer pays the rest
The excess is the deductible amount the policyholder bears per claim. Standard excess is typically SGD 500-1,000, with additional excess for young or inexperienced drivers.
Question 4: What additional excess applies to young drivers in Singapore motor insurance?
- No additional excess applies
- Drivers under 27 or with less than 2 years of driving experience typically face an additional young/inexperienced driver excess (Correct answer)
- Young drivers get discounts instead
- Only drivers over 65 face additional excess
Correct answer: Drivers under 27 or with less than 2 years of driving experience typically face an additional young/inexperienced driver excess
Young drivers (under 27) and inexperienced drivers (less than 2 years of licence) are statistically higher risk. Insurers impose an additional excess (typically SGD 500-1,500) on top of the standard excess.
Question 5: What happens to the NCD if a motor insurance claim is made in Singapore?
- NCD is unaffected by claims
- The NCD is reduced or lost entirely depending on the insurer's policy, typically dropping by 10-30 percentage points per claim (Correct answer)
- NCD only changes at renewal
- NCD increases with claims
Correct answer: The NCD is reduced or lost entirely depending on the insurer's policy, typically dropping by 10-30 percentage points per claim
Making a claim typically reduces the NCD. Some insurers reduce it by 10-30 percentage points, while others reset it entirely. NCD protector add-ons can help preserve the discount.
Question 6: What is a 'named driver' policy in Singapore motor insurance?
- A policy for famous drivers
- A policy that only covers specifically named drivers; any unnamed driver using the vehicle is not covered (Correct answer)
- A policy for company vehicles only
- A policy covering any driver
Correct answer: A policy that only covers specifically named drivers; any unnamed driver using the vehicle is not covered
Named driver policies provide coverage only for drivers specifically listed on the policy. If an unnamed person drives and has an accident, the claim may be rejected or an additional excess applied.
PGI Motor Insurance
What are the three types of motor insurance coverage available in Singapore?