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Insurance for Expats in Singapore

Submitted: April 2014

Fundamentally, insurance is mainly a financial service which is designed to reduce risks. An insurance product transforms the cost of your potential large liabilities or expenses into regular premiums. An insurance product “ensures” that your situation is more stable/less risky than what it would otherwise be, but it is certainly not a way to evade the liabilities you are potentially responsible for.

Do not wait for problems to arise before reviewing your insurance arrangements. Once you have a problem, it is already too late. Being poorly insured is risky whereas being over-insured is expensive.

There is a wide range of competing insurance providers in Singapore, and it is advisable to shop around and compare before taking out an insurance policy (premiums, levels of coverage, no-claims discounts, etc.). It’s also good to check the financial strength and the reputation of your insurer.

If you are unclear about your cover or your needs whilst you are in Singapore, you might wish to check your existing insurance arrangements in your country of origin. This is important if you want to avoid double coverage. If you are frequently travelling to West Malaysia, check if you are covered in both Singapore and West Malaysia.

Insurance isn’t necessarily a country-specific issue, but how much insurance you need may vary from one country to another. This is because your potential liabilities, such as medical bills, are specific to a jurisdiction.

Home insurance

Your home insurance needs depend on whether you own your home, or if you rent it.

For homeowners, your home insurance policy protects you against damage to your building, and is generally required to secure a mortgage. This may cover the costs of rebuilding your property from scratch, legal fees or the costs of certain exceptional repairs. Home insurance may also cover you against third party liability if an accident happens in your home. Do also expect home insurance to be a requirement if you intend to apply for a mortgage.

For tenants, home insurance can be much cheaper than home insurance, as tenants only need to be insured against their belongings and public liability if an accident happens in their home.

As for all insurance policies, it is up to you to decide how generous you want your cover to be, what the excess amounts are, which unexpected expenses are covered (e.g. alternative accommodation), etc.  If you are letting your property, homeowner insurance may also be used in order to be insured against losses of rents.

For a comprehensive home insurance policy, premiums generally vary from SGD 15 to SGD 30 per month.

Going away from home

If you expect to be away from your home for more than one month, you should let your insurer know. Failure to do so may result in a claim being rejected if something happens to your home whilst you are away.

Car insurance

Car insurance is mandatory in Singapore, and your policy must generally include at least third party cover. This should insure you against potential liabilities for third party death or bodily injury, but not damage or theft of your own car. If you need your vehicle to have more than just third party cover, you might wish to take out a comprehensive vehicle insurance policy.

In practice, Singapore-based insurers will adjust the premiums depending on the following factors:

  • Age of the driver – the young and the elderly are high-risk individuals
  • Car value – you’re better off insuring it for its true value
  • Engine size – the bigger, the riskier
  • Age of the car – the older, the riskier
  • Driver’s licence – a provisional licence is much riskier
  • Driver’s driving history – do provide evidence about your foreign history when applying for car insurance
  • Professional use – this tends to add to the premiums

Health insurance

Private health insurance in Singapore is essential for expatriates, as Singapore is a wholly private system. The good news is that healthcare costs in Singapore are quite low, especially when compared with Hong Kong or the US.

Expatriates may consider an international cover in order to ensure coverage both in Singapore and in their home country. International covers tend to be more expensive, but they are straightforward and very helpful if you need to “bridge the gap” between Singapore and your home country. Expats who frequently move across borders are more likely to need an international cover to achieve peace of mind.

Life insurance

Life insurance can be particularly helpful if your family is financially very dependent on you, as it may guarantee a lump sum payment to your family if you die.

Do assess carefully the burden of retaining foreign life insurance while you are resident in Singapore. Do also check the geographical extent of your existing life insurance policy when you move across borders.

Business insurance

If you run a business in Singapore, you probably need personnel insurance and public liability insurance.

Personnel insurance protects you in case one of your employees has an accident or an illness in connection with his/her employment duties.

Public liability insurance covers you against certain third party claims against your business. This may also include legal costs.

 

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