Hello ,

Good day! Zest here.

In my previous email, I discussed insurance coverage for car repairs due to "Acts of God," such as floods. I also highlighted the importance of understanding your policy terms so that, if a claim arises, you know you're well protected.

Today, I want to address a less common topic that's been in the news recently. In December 2023, a woman's BMW was damaged in a flood at Serangoon Gardens Country Club Car Park, and she couldn't get compensation from the club.

In situations where your car is deemed irreparable (i.e., a "Total Loss"), whether due to a flood or an accident, and you have to claim damages from your own insurance because the third-party coverage is insufficient or delayed, how would your own car insurer handle this?

First, note that only comprehensive plans cover Total Loss due to damage from "Acts of God" (e.g., floods), fire, or theft. If you have a Third Party Fire and Theft Insurance policy, your insurer will only pay the market value of your car at the time of loss.

Here are two potential outcomes if your car is declared a Total Loss:

Scenario 1: If your car is involved in a serious accident within 1 year of purchase, you may be eligible for a replacement. Below is a sample policy wording from an insurer.

Scenario 2: If your car is over 1 year old or you are the second owner, you may receive a reimbursement of the car's current market value. In these cases, the repair costs usually exceed the car's value. Below is a sample wording from an insurer.

If your outstanding car loan exceeds the current value of the car, the insurer will pay only the market value. The compensation will go to the bank to clear the loan, and any remaining balance (If Any) will be paid to you.

If you feel the insurer's market value estimate is unfair, websites like SGCARMART can help you negotiate a higher value.

Understanding the terms of your car insurance policy ensures you're getting the best possible value for your damaged or lost vehicle.

I hope the above insights were useful!

Feel free to reach out with any questions.

Have a blessed weekend!

Best Regards,

Zest Chia

Executive Wealth Consultant | Associate Estate Planning Practitioner |

Licensed General Insurance Advisory

DISCLAIMER;

This message contains privileged and confidential information from Infinity Financial Advisory Pte Ltd. If you are not the intended recipient of this electronic message, please do not disseminate, copy or take any action in reliance on it. We request you notify us immediately before deleting this message. Any views expressed in this message or attachment/s are those of the individual sender and are not necessarily the views of the company. Infinity Financial Advisory Pte Ltd uses virus scanning software and while due care and attention is taken; the company excludes all liability for any loss or damage caused whether directly or indirectly by any computer virus or other defects transmitted with any email and any attachment(s), to the extent permitted by law. It is sent on the strict condition that the user carries out and relies on its own procedures for ensuring that its use will not interfere with the recipient's systems including but not limited to scanning this email and any attachment(s) for viruses and defects before opening or sending them on. The recipient assumes all risk of use and releases the sender from all responsibility and liability for any direct or indirect consequence of use.