InsureGuru Learn

How Lending Your Car To Friends Or Family Affects Your Insurance In Singapore

If you own a vehicle in Singapore then you obviously have vehicle insurance since it is mandatory by law. However, there are various things that one needs to know about their insurance cover especially if you are not the only one that that drives said vehicle.

The whole idea behind car insurance or any other general insurance is to avoid having to paying a large amount out of pocket in case an accident or breakdown happens.

Take some time to read through your car insurance policy and speak to your insurance agent should you have any questions.

The Default Named Driver and Excess Fees

Third-party and comprehensive insurance packages are common in vehicle insurance. However, there are things like the default “named driver” that you should consider.

It means that the owner of the vehicle is the person that is registered as the driver of that particular vehicle in the insurance form. However, the number of named persons is not limited to one person and it is important to consider adding other names especially of your family members or friends who also drive your vehicle.

Insurance companies may require you to pay a small excess fee that may be as low as $200 if you wreck your vehicle. However, the excess fee might dramatically go up to more than $1,000 if it was a friend or a member of your family who crashed the vehicle.

You can take steps to avoid being caught up in such a situation that would require you to fork out such a large amount of money. You can add a few other drivers to the insurance cover.

For example, a spouse, sibling or friend. Doing so would raise your monthly premium a while back but nowadays insurance companies allow vehicle owners to add up to 5 named drivers at no extra cost.

Although insurance firms now allow extra named drivers, there are some caveats. The drivers may be required to have at least two years of driving experience and to be at least 27-years-old.

The reason for this is to make sure that only careful and responsible drivers are allowed. The excess fee might go higher if you decide to add an inexperienced driver or a younger driver.

Named Drivers Also Influence the No Claim Discount (NCD)

The NCD is a discount that a vehicle owner is awarded if they go for an entire year or more without getting involved in an accident. The discount grows higher the longer that the insured goes without a claim. This means that a vehicle owner might receive a 10% discount the next time they renew their cover.

The thing about the NCD is that it is not assigned to the vehicle but to the driver. This means that you alone as the registered owner of the vehicle will benefit from the NCD. You cannot transfer your NCD to your friend or relative who drives your car.


Lending your vehicle to a trustworthy family member or friend is something that many Singapore vehicle owners do. In that case, it is important to carefully go through your insurance company’s terms and conditions so that you understand how it handles such issues.

It might actually save you some cash in case one of the people who drive your vehicle cause an accident. Also consider that Singapore-based insurance companies may each have a different approach on the matter, thus the need to consult an insurance agent.

Sim Kwang Meng

Chief Operating Officer

Mr. Sim has more than 40 years’ of experience in General Insurance. He joined Pana Harrison since 2003, and specialised in Property and Casualty. Prior joining Pana Harrison, he was AGM for Commercial Union Assurance Pte Ltd.