What can we help you with?

Knowledge is Power. Key Car Insurance Terms Explained


Risk comes from not knowing what you're doing. Like trying to take a selfie with a tiger, or drinking seawater. Not cool. Knowledge and understanding can make all the difference. For example, you are at the Doctor’s and you are told you have adhesive capsulitis, do you run out screaming in fear for your life? No, you can relax. It’s simply a frozen shoulder.

Like medicine, insurance can be full of technical language we would never use on the average day. Language that comes into it’s own when you are trying to understand your policy, or you want to make a claim.

DirectAsia likes to make complicated things simple, here is Part One of our handy guide to tricky insurance terms.

Key Insurance Terms – Car Insurance

Act of God (Force Majeure)  - Courts have recognized various events as acts of God—tornadoes, earthquakes, extraordinarily high tides, violent winds, and floods. With Comprehensive Car Insurance, we will cover the cost of repairing your car up to the market value of your car if it is damaged by an act of god, a storm (including lightning), flood or other water damage.

Deductible  - The same as ‘the excess’. The insured person pays an agreed proportion of the relevant loss. If the total loss ($75) is less than the amount of deductible ($100), the insured person pays all of the loss. Some insurance company allow flexibility to select your preferred deductible should result in a change of premium.

Young And/Or Inexperienced Drivers -  Not all definition of Young and/or Inexperienced Drivers are the same between insurance companies. You can check with the insurance company when requesting for a quote.

Most other companies will insure any number of young and/ or inexperienced drivers which means that even if you don’t have such drivers you may be paying for those that do and an additional Young and/or Inexperienced Driver excess may be applicable upon claim.

Market Value  The cost of replacing your car with one of the same make and model, of similar condition, specification and age as prevailing immediately before the accident. Typically the COE is a component of the market value of the car.

PARF Car  Generally, new cars come with an Open Market Value (OMV). This is the original cost of production of the vehicle, including purchase price, freight, insurance and other charges incidental to the sale and delivery of the car to Singapore. You can find the OMV for your car at onemotoring.com.sg

If the vehicle is de-registered within 10 years of its first registration date, the registered owner can claim a Preferential Additional Registration Fee (PARF) Rebate. Normally a percentage of the OMV. Hence, the term PARF car.

Invest 5 Minutes For Instant Rewards

Get great value car insurance in just 5 minutes. Buying direct you avoid paying brokers’ commission of up to 25% on your insurance. Choose the plan you want. Pay the way you want. You are insured!