Scooby's Noteboard: Insurance Matters

Motorcycle Insurance

Motorcycle insurance coverage is required in Singapore (and many countries) whether we own a small cheap <100cc motorcycle or an expensive "car like" 1800cc Gold Wing. Other than being mandatory (required by LTA), they help the insured (riders) indemnify or cover financial liabilities on 3rd party (damages to property/vehicle and/or injuries to human/livestock) in the unfortunate event of an accident. Extent of financial protection depends on the type of policy/plan insured.

With the many insurers available in the market, choosing a suitable plan may require quite some homework...
there is no correct insurance policy but just suitable ones that meet each rider’s needs.

Factors to consider when selecting an insurance policy:

Insurance Premium

Goes without saying, price is of course one of the key deciding factors. Price of each plan depends on level of coverage, excess and/or workshop options, amount of NCD, age and experience of the insured, etc.

Basically, “how much is your budget?”

Level of Coverage

Generally, there are 3 levels of coverage for our bikes, subject to terms and conditions of the respective plans:

(1) Comprehensive … most expensive of the 3 as it covers both 3rd parties as well as the insured's own bike in case of "self repairs/claims"; usually limited to 1~3 years old bikes but some insurers accept up to 5 years (subject to terms/inspections).

(2) 3rd Party Fire & Theft (commonly referred to as 2nd party) … covers only other parties and market value (after deducting excess) of insured’s bike if it is lost/stolen; insured’s bike is not covered.

(3) 3rd Party … most basic and cheapest but covers only other parties; insured’s bike is not covered at all.

Basically, Higher Coverage = Higher Premiums

Level of coverage suitable for a particular rider depends on factors such as level of risk (e.g. local riding or touring, weekend bike or daily commuting bike, safe environment or busy/rugged terrain, type of bike, etc.), age of bike, market value, availability and cost of bike’s parts, etc.

Note:Except where additional coverage are purchased, all the above insurance plans do not cover the insured riders (including named riders), even for comprehensive plans. Pillion riders shall claim the riders' insurance policies as 3rd parties.
i.e. riders need to purchase separate insurance plans (e.g. Personal Accident) to cover their own medical expenses in the event of an accident.

Potential Cost of Self Repair

If the cost of repairing or “writing off” the bike is only a small sum, most riders would consider only a 3rd party plan. On the other hand, if the bike is one that could cost thousands to repair/restore when damaged, a Comprehensive plan is highly recommended.

No Claim Discount (NCD)

NCD is usually transferrable among insurers in Singapore. Insurers may need proof or documentations for verification before they grant the NCD claimed by the rider to be insured. Renewal notice indicating the amount of NCD granted from the last insurance company is a commonly used proof. Some insurers give additional 5% NCD as a bonus to encourage renewals with them (customer retention).

Excess & Minimum Claim
Excess is the amount which biker/insured needs to bear in respect of a claim before the insurer indemnify the claim.

Most insurers impose a minimum claim amount whereby loss or damage claims less than a stipulated amount would not be paid for by the insurer. The amount of excess vary among insurers, policies and premiums; some policies allow excess to be lowered at higher premiums.

Excess amounts may also vary in different situations of claims such as local claims, overseas claims, loss in Singapore, loss outside Singapore, etc.

E.g. an additional excess equal to 50% of bike’s market value at time of loss subject to a maximum of $2.5K if bike is stolen outside Singapore. i.e. if market value of your SW is $9K and it is unfortunately stolen during a shopping trip to JB, then total excess payable before claim could be $3K ($500 normal excess + $2.5K capped overseas excess); more unfortunate if market value is only $5K as total excess is still $3K, but can claim only $2K; most unfortunate if market value is only $3K, can't claim any amount after factoring in total excess.

Note:
The market value of a bike to the insurers is not the same market value to the owners. For owners, we commonly view the market value as "how much it could be sold in the market". For insurers, they usually value the bike at paper value... commonly the sum of residual value of COE, value of bike in scrap/spares market, plus a little "premium".

Workshop of Choice

Only applicable to comprehensive plans. Most insurers offer different premium with different levels of customer options. While some plans allow the insured to carry out the repairs/restorations at workshops of their choice, some plans restricts the jobs to their designated workshops (with options to remove such restriction at higher premiums).

E.g. NTUC motorcycle insurance has price plans such as Classic or Classic Plus which require the biker/insured to go only to NTUC designated workshops in times of a claim. It also has Premium and Premium Plus plans where biker/insured may choose to repair his/her bike at workshops of their choice; premiums are much higher for such plans.

Geographical Limits

Generally, most local policies cover claim incidents arising within Singapore, West Malaysia and a restricted part of Southern Thailand demarcated by distance from Thai-Malaysian borders, subject to terms and conditions.

E.g. NTUC motorcycle insurance plans covers the (Classic or Classic Plus) insured up to 80km from the Thai-West Malaysian border. i.e. if accident occurs at places outside the coverage boundary (e.g. Krabi, Phuket, Bangkok, etc.), the insurer will not be liable for any damages (including 3rd parties) incurred in the accident.

Note:
Temporary 3rd party insurance in Thailand is available at affordable prices/premiums near the Sadao immigration. However, it covers only human/life and livestock of the involved 3rd parties, vehicles of all parties are not covered.

Exclusions

Exclusion clauses by most insurers are similar, with minor differences if any.
E.g. war related incidents/activities, rebellion/riots, consequential loss, mechanical or electrical breakdowns due to wear-n-tear, loss or damage to accessories or parts due to theft, when in use by unauthorized user, etc. Note:
One tricky issue is with touring... best to check with your insurers.

Most insurers accept that "as long as the activity is not excluded in the policy document, coverage is available". i.e. as long as we are using the motorcycle for commuting between cities in the covered zones (see geographical limits), we should be covered.

Nevertheless, a travel insurance (and Thai 3rd party if riding into Thailand) policy is highly recommended for touring to supplement the additional coverage needs which are not covered by the usual motorcycle insurance policies.
e.g. medical claims for injuries or sickness, travel delays, loss of monies/baggage/travel documents, repatriation, emergency evacuation, etc.

Declared Usage

Some insurers require the insured to declare the purpose or usage of the bike being insured. Any damages sustained during an undeclared/uncovered usage could void the insurers' liability to pay for the repairs/restorations.

Best Policy = Safety Policy
"Regardless of policy chosen and premium paid, ideal situation is not to need it".

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Recommended General Insurance

Personal Accident Insurance

Apart from insurance plans for the motorcycle and 3rd parties, the rider needs to be insured for the risks he/she is exposed to while riding.

All motorcycle insurance, regardless of 3rd party, 3rd party fire-n-theft (aka 2nd party) or comprehensive covers only 3rd parties and for the case of comprehensive policies, the insured vehicles (subject to excess). The pillion rider is covered as a 3rd party but not the insured rider (including named riders), even for comprehensive plans. In other words, riders have to purchase separate insurance plans to cover their own medical expenses in the event of an accident. Some motorcycle insurance plan may have "PA riders" available, but extra premium applies.

Example/illustration of policy coverage (terms and conditions)
... based on NTUC's comprehensive plan
http://www.income.com.sg/forms/insDo...Motor-Bike.pdf

Rider carrying a pillion crashed his bike into the rear of a car, damaging the car's rear section, both rider and pillion were injured.

(a) rider may claim the policy for repairs to the bike (subject to $500 excess),
(b) pillion (considered 3rd party) may claim the motorcycle insurance policy for his/her injuries,
(c) car owner may claim the policy for repairs to the resulting damage (subject to max. of $500k and determined liability),
(d) rider cannot claim the policy for his/her own medical bills or resulting disabilities, etc.

To cover the "coverage gap" (d), separate insurance plans are required, usually by a Personal Accident (PA) plan, up to the amount of medical coverage purchased; higher premiums for higher medical expense coverage.
When buying such plans, it is important to declare and ensure that riding of motorcycles are covered, as some PA plans do not cover motorcycling activities including pillion riding. In some cases, the insured person may need to pay higher premium (called loading) to include the higher risk coverage.

e.g. see page 5 of 10 in NTUC's Policy Schedule (aka Terms and Conditions), Part III, Para 1 section (o).
http://www.income.com.sg/forms/insDocument/PA.pdf

When the medical coverage amount of the PA plan exhausted (e.g. serious accident which requires days of hospitalization, surgery and follow rehabilitations), a Medical insurance plan may be required to cover the exceeded expenses.

SAF Group (Term Life) Insurance

Many of us are/were NSmen who are currently insured under the SAF Group Insurance (full name of plan is SAF Group Term Life Insurance).
http://www.aviva.com.sg/life-and-health/for-individuals/saf-insurance-for-nsmen.html

Although the policy summary showed a category of coverage called “Personal Accident Coverage”, the PA coverage is different from PA plans from other insurers such as AIA, Prudential, NTUC, etc.

SAF Group Term Life Insurance DO NOT offer medical coverage, it covers only death and total permanent disability and disablement of specific body parts.
i.e. money for bills on medical, hospital, surgical, emergency evacuation, etc. need to come from somewhere else, either another insurance plan or the riders’ own pockets.

Some examples of PA policies with motorcycle coverage...
* NTUC Personal Accident Infectious Diseases Plan
* Prudential PruAccident Cover
* AIA Personal Accident Insurance

Travel Insurance

Travel insurance covers many risks not covered by other insurance plans. Although medical expenses on body injuries could be covered by PA and Medical insurance plans, they do not cover general illnesses, emergency medical evacuation, repatriation, baggage loss/theft, trip cancellations (under certain conditions), extension of stay, flight delays, emergency call charges, certain personal liabilities, etc.

Theoretically, a Travel insurance plan can replace both the PA and Medical plans as it covers more than.

Some (non-exhaustive) Singapore Travel Insurance with coverage for our Touring
* 1Cover.com (underwritten by Tokio Marine Insurance Singapore Ltd) … online available
* NTUC Income Travel Insurance (premium +25% loading) … online available
* Chartis Travel Guard … online available
* QBE Travelon Cover (premium +loading)

Recommended Coverage?

With so many different types of insurance plans available, what are the recommended policies/plans that a rider should have?

Let's not include those non “riding related” plans such as investments, life/term, critical illness, savings and retirement plans, etc. in this discussion.

(1) Motorcycle Insurance (mandatory by LTA)

Comprehensive, 2nd party or just 3rd party depends on individual needs/preferences.

(2) Personal Accident Insurance

This is to cover the insured/rider’s medical expenses incurred due to the accident (on a reimbursement basis), limited to the amount covered (different premium applies). Expenses Rider must ensure that the PA plan covers motorcycling before purchase.

(3) Medical/Hospitalisation Insurance

Commonly referred to as “Hospitalisation and Surgical” plan.Medical expenses when rider is hospitalized and/or surgical procedures are usually very high, easily exceeding the amounts covered in PA plans. Medical plans are useful in such cases. This plan does not cover expenses where the rider is not hospitalized but receives outpatient or “1-day” treatments… rider to claim under PA plans.Coverage of medical plans are not restricted to accidents.

(4) Travel Insurance

Only required when the rider goes overseas for touring rides, especially when riding into Thailand and beyond the covered “geographical boundaries” of his motorcycle insurance.

(5) Thailand Temporary 3rd Party Insurance

Only required when the rider rides into Thailand, especially when travelling beyond the covered “geographical boundaries” of his/her motorcycle insurance.

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Voluntary 3rd Party Insurance in Thailand

Like the title says, this Thai 3rd Party Insurance is purely optional, i.e. you do not need it to enter Thailand. However, it definitely worth considering since it doesn't cost much.

Most of the insurance policies (mandatory requirement by Land Transport Authority for Singapore bikes to renew road tax) we have covers the insured motorcycle (for comprehensive plans only) and 3rd parties for accidents occurring in Singapore, West Malaysia and a stipulated distance from the Malaysian-Thai border (usually about 50 miles or 80 km). Thus, it is useful when we leave the 50 mile or 80km boundary (e.g. trips to Krabi, Phuket, Ko Samui, Bangkok, etc.) and provides additional protection for bodily injuries to 3rd Parties while in Thailand.

The Thai 3rd Party insurance is valid throughout all locations in Thailand and provides coverage for bodily injuries to 3rd Parties. It DOES NOT provide cover for our own injuries, 3rd Party's and/or our own vehicles. For car, there are additional insurance "add-ons" available to cover 3rd Party's vehicles (not our own).

There are many shops before and after Sadao Immigration Checkpoint selling such insurance policies and one of them is Chuan Bee Coffee Shop. It is located in Changlun (Bukit Kayu Hitam, Kedah), on the side along North South Expressway way towards Sadao checkpoint, making it a very convenient spot to stop by.

Getting There:

If you have a GPS, the coordinates are N06 25.630 E100 25.715.
The Coffee Shop is located at the junction between North South Expressway and a small road (on left) about 420m after Petronas Changlun, just before a concrete overhead bridge (one and only one there) facilitating access to the other side where a school is located. If you pass the bridge, you have missed it.

See map below.