7 Car Insurance Myths, Debunked — Verified by Insurance Experts at DirectAsia

DirectAsia Car Insurance Myths: True or False?

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Whether you’re planning to buy your first car or you’re a seasoned driver, you’ll need to be aware of factors that affect your car insurance policy and premiums instead of just buying what the car showroom recommends.

We speak to insurance experts at DirectAsia to find out more about 7 common car insurance myths, and the actual truths behind them.


1. I’m driving an old car, so can I just get Third-Party Only insurance?

Yes, you can, if the car is at the end of its Certificate of Entitlement life (car up to 50 years old) and you have an adequate amount of driving experience with a good track record (not more than 1 at-fault accident in the last 3 years).

People get Third-Party Only insurance as it is the most basic form of car insurance and is the cheapest type. This is because TPO only pays when you’ve damaged another person’s car. You will be responsible for any repairs to your own vehicle.  

For example, DirectAsia’s TPO covers up to $5,000,000 in third party property damage. However, drivers have the option to add on benefits such as personal accident coverage for the driver (up to $500,000), medical expenses for both the driver and passengers (up to $3,000/person), and the No Claims Discount (NCD) Protector Plus will protect up to one claim per policy per year.

This makes monetary sense if your car is so old, it’s ready to be scrapped; and/or you’re confident/steady enough on the road that the Traffic Police see you as a role model.

Nevertheless, if you’re worried about the “what-ifs”, perhaps TPO isn’t for you. Consider getting comprehensive car insurance or a TPO that also covers fire and theft instead for greater peace of mind.


2. I should just get my car insurance via my dealer for the best rate/discount

When you’re buying a car, chances are, the dealer will include the car insurance premiums in the package price as well. Opt to remove this component and the dealer may also remove the “discount” they’ve offered on your car — this is not a small sum, and could amount to a 4- or 5-figure difference.

When buying car insurance, be it through the dealer or on your own, be sure to compare the premiums. There may be a chance that your dealer has a tie-up with an insurer — this could either mean lower premiums for customers or a cut of the commissions for the dealership.

However, if you’re strapped for time, it’s definitely convenient to just settle the insurance component there and then at the dealer and be done with it.

For those seeking more control, they can shop around for their preferred car insurance. There’s a higher chance they can choose the features and benefits that they actually need, instead of the one-size-fits-all car insurance offered by their dealer.

For example, DirectAsia’s car insurance policies can be customised to your needs and budget, from as low as $0.76/day. There’s also the option to tack on additional protection such as 24-hour breakdown assistance, NCD protection, compensation for loss of use, and so on.

Cost aside, it really depends on what you want — convenience or control.


3. I should avoid buying a red car, as that could mean paying higher premiums

You may have heard that red cars are more prone to accidents, but the truth of the matter is really that most insurers don’t even ask for your car’s colour.

For example, when you purchase car insurance through DirectAsia, the information needed is the brand and model of your car, the vehicle’s year of registration, age; as well as details about your driving experience, marital status, NCD status and so on… There’s nothing to ask you about the colour of your car.

In Singapore, there are no restrictions on paint colours, but drivers should do their due diligence to update their car colour on the OneMotoring website ASAP. Red is the least of your worries — even if you want to paint Hello Kitty on your car or a wraparound sticker, go ahead.

However, car finishes that could affect other road users are not allowed, such as chrome-plating your car. This causes glare and distraction, possibly compromising road safety.

So, be unique and flaunt your individuality, but be considerate, kay?


4. Can I register the main driver of the car as my mum so I pay lower insurance premiums?

NO. This is tempting as you pay less, but it is deemed as “fronting”, which is considered fraud.

First things first: You can only buy a policy for the car that is registered under your name. So maybe you’re thinking if you could skirt around this issue by registering the car under your mum’s name, buying the policy under her name, and listing yourself as a named driver.

That’s okay if the car is a pressie for Mum, and she’s the main person driving out for tea with her friends or for shopping/work. Maybe you take the car out sometimes, but it’s mostly for her convenience.

However, if you’re actually the main driver, you’re in big trouble. Uh oh. Fronting could invalidate your policy, get you blacklisted (insurers won’t sell you anymore insurance; and no car insurance means no more car), or even get you in trouble with the law.

If you really want to save money on your car insurance premiums, consider opting for higher excess (but make sure it’s a realistic amount that you’re able to pay should the need arise).

What if I want to drive my friend’s car?

Having comprehensive car insurance doesn’t always guarantee that you or your friend will be insured if someone who is not a named driver takes the wheel. It may even be illegal. Always check the terms and conditions of the car’s insurance policy.

For example, DirectAsia has a flexible driver plan, which covers an unlimited number of drivers (they need not be named drivers), including both experienced and inexperienced drivers.


5. I have more than one car; it’s okay to insure each car under different insurers and plans

There’s no ruling dictating that all of your cars must be under the same insurer. It’s likely that you bought each car at a different time, and depending on the car insurance promotion available, you may have chosen that specific policy. You may even have a special car insurance policy for your sports car; and you’re opting for another specialised plan for your vintage Jensen Interceptor III.

However, you may be conscious of the cost to insure each of your cars. Also, do note that if a car is driven by other members of your family, especially young/inexperienced drivers, adding named drivers can add to the premium cost as well.

While your NCD can be transferred from insurance to insurance, it can only be applied to one vehicle at a time. One bonus: Insurer DirectAsia offers NCD60 (that’s an additional 10% discount) for drivers who have NCD50 for at least 5 consecutive years.


6. I need to report every single accident to my insurer, but I’m worried it will affect my NCD

You MUST report ALL accidents to your insurer within 24 hours — regardless if there is damage or not. Failing to do so might incur penalties: Your insurer may cancel your policy, decline to invite renewal of your plan or confiscate your NCD entitlement if there is any delay.

It is also better to be safe than sorry. Who knows? Something “small” that happened may inevitably lead to bigger issues down the road, and possibly, potential insurance rejection.

For example, a minor car accident that resulted in a private settlement should always be reported and within the stipulated time period. Maybe the other party seems amenable at the scene, but you may be slapped with an intimidating lawyer’s letter a couple of weeks later. Before making a decision, it’s best to check with your insurer prior, in case you commit a mistake that could seriously affect your claim.

But I’m afraid to lose my NCD!

You won’t necessarily lose your NCD if you make a claim. According to the General Insurance Association of Singapore, your NCD may not be affected if you are found totally not at fault in an accident involving another vehicle.

DirectAsia provides an exclusive NCD Protector Plus benefit for drivers who are currently at NCD30/40/50. They will be able to advance to the next NCD level (or retain their current NCD level) even with 1 at-fault claim. 


7. I was involved in 2 at-fault accidents. How do I even get insured now?

It’s perfectly understandable. If you’re too accident-prone, insurers may not want to take on the extra risk to insure you and your car — even if you still need to drive as part of your livelihood or there’s a family situation that requires you to drive.

Thankfully, there’s still such a thing as SOS Car Insurance, which is offered by DirectAsia.

How it works: The SOS cover is similar to a comprehensive car insurance plan, providing protection that includes liability to third parties and loss due to fire, theft and natural disasters; as well as window breakage, towing expenses and more.

It can further be customised with optional benefits such as Loss of Use, 24 Hour Breakdown Assistance and My Workshop (you get to choose your own workshop) for even greater protection.

This SOS cover is specifically designed by DirectAsia to help drivers needing a second chance. These drivers may have, in the last 3 years, have had 2 or more at-fault accidents or had their insurance refused or terminated.


Consider DirectAsia’s car insurance plans

DirectAsia’s customisable car insurance plans provide a wide range of benefits, such as:

  • NCD60
  • NCD Protector Plus
  • 24 Hour Breakdown Assistance
  • My Workshop
  • Compensation for Loss of Use
  • New for Old Replacement Car 
  • Coverage of eligible accessories
  • Various driver plans
  • Lifetime repair guarantee 

…And more

There are also a slew of promotions going on now, for even greater value and cost savings:

  • From now to 30 June 2021: Free 1 month car insurance with the promo code “CAR1MONTH”
  • Receive up to $100 worth of Shell fuel plus free 24 Hour Breakdown Assistance (Ends 31 Dec 2021)
  • Refer a friend and you both receive $25 shopping vouchers each
  • Enjoy extra 10% off insurance for your second car
  • Drivers aged 56 years old and above can get one month free car insurance with the promo code “SC1MONTH”

Terms and conditions apply. Click here for the full list of DirectAsia car insurance promotions and details.

Whether you’re a seasoned driver or you’re shopping for your first car, there’s something for everyone at DirectAsia Insurance. Find out more about DirectAsia’s car insurance plans or request for a quote here.