With over 970,000 vehicles currently on the streets and over 8,200 traffic related casualties per year, accidents are bound to happen in Singapore.

In order to fully grasp how Singapore law protects those injured by car accidents, and how mandatory auto insurance in Singapore benefits everyone, let’s have a quick look at the Motor Vehicles (Third Party Risks and Compensation) Act of Singapore.

The Basics – What is the Motor Vehicles Act of Singapore?

The Motor Vehicles (Third Party Risks and Compensation) Act is a legislative document originally enacted in 1960 to cover the monetary costs and other repercussions that might occur as a result of fatal or non-fatal injuries to a third party in a car accident.

Thanks to this law, vehicle owners or their motor insurance companies are obligated to pay for the hospitalization of the victims of the car accident, and any additional compensation that may arise. Although drivers should usually be accountable for said occurrences, this liability can be transferred to an auto insurance company through a certificate of insurance.

The Penalties – What happens if one of the parties involved doesn’t follow regulations?

Bear in mind that this act is mandatory, and anyone found failing to comply with this law is subject to fines of up to $1,000. Repeat offenders can even find themselves jailed for up to 6 months.

What should a driver do if caught in an accident, and how far does his liability go?

After an accident has occurred, drivers are required to show their insurance certificate. If they don’t manage to produce it at that very moment, they have up to 24 hours to do so by reporting the accident at a police station with their certificate at hand. Failing to comply with this obligation, the driver will incur on the penalties previously mentioned.

It’s worth mentioning that in Singapore, only the vehicle’s owner is allowed to drive it, unless the insurance policy of the owner states otherwise. The following penalties may apply:

• A user caught breaking this rule will be fined and could face jail time of up to 3 months.

• The vehicle user’s driver’s license will be confiscated and rendered useless for 12 months.

These penalties can be avoided under certain circumstances such as if the driver manages to prove that he had no previous knowledge of not being covered by the policy, or if driving the vehicle was part of his job.

Keep in mind that a driver is fully responsible for his passengers, no matter what kind of terms were previously agreed on. Just because a passenger is aware of the risks and willingly takes them, doesn’t suddenly lessen the driver’s liability. This liability doesn’t cease even with the death of the driver or the insured.

Step by step – How does the Motor Vehicles Act of Singapore protect me?

After the incident has occurred and the owner has presented his certificate of insurance (or none at all if he plans on covering the damages himself), the car insurance company (or the owner) covers the costs of hospitalizing the victim. This either means covering the costs of out-patient hospital services, or covering the reasonably incurred expenses of in-patient hospital care.

This coverage goes up to $40 for each person given out-patient hospital services and $400 for each in-patient hospitalization.

Aside from that, motor insurance companies must cover securities of at least $225,000 for cases related to public service vehicles, and $45,000 for any other cases.

Are there any further indemnities paid for the damages done to the victim?

After the hospital expenses have been paid for, an additional compensation can be claimed by the victim. This amount is usually not specified by the insurance policy itself and more often than not exceeds the regular costs incurred by the accident. As a result, the exact amount is open for negotiation in court and might not be covered by the auto insurance company.

When this situation arises the victim will have to appoint a public trustee who will represent his interests and funds, and a lawyer who’ll take up the case in court.

Payment of the settlement will only be done once both parts either agree on the amount of money, or if the court considers the amount offered reasonable. Any actual payment or agreement must be substantiated with the relevant documentation.

Keep in mind that before paying the indemnity money to the beneficiary, the lawyer and the public trustee must subtract their payments, after which the final amount is given to the victim. If the beneficiary happens to be younger than 21 years old, the public trustee must hold onto the money until the beneficiary reaches said age requirement.

When can insurance coverage be made void?

Always remember that insurer liability cannot be undone unless some specific conditions are met, such as the owner’s vehicle carrying too many people, the bad state of repair of the vehicle itself and the state of the driver during the accident. Only then can the policy be voided; however, if the car insurance company ends up paying for the liability, the amount can be contested by the insurance company and deducted from the vehicle owner’s funds.