Car Insurance Buying Guide for Those Moving to Thailand

Car insurance in Thailand

Like many countries, it is compulsory for vehicle owners in Thailand to have car insurance. You will be required to have at least a Compulsory Motor Insurance (CMI or PorRorBor) policy. CMI is a pre-requisite to annual car registration and required by law. It has a set insurance premium which depends on the type of vehicle.

“You can buy CMI from the local Department of Land Transport Office (DLT), from car insurance companies and from brokers, including online (such as at DirectAsia.co.th). The only information required is the owner’s Passport number and car details.”

“CMI however, only covers third party liability, which means injury to other drivers and their passengers, up to the limit prescribed in the law. You can buy additional Voluntary Motor Insurance (VMI) to enjoy greater protection and peace of mind when driving on Thai roads.”

Buying voluntary car insurance

There are more than fifty insurance companies and dozens of financial institutions offering car insurance in Thailand. Products and price are generally similar, in part due to a regulatory tariff, which ensures that premiums charged are within a minimum and maximum tariff range.

In Thailand, voluntary insurance varies, from full comprehensive cover, to more limited covers. These are referred to as Classes or Types:

• Type 1

  Also known as full Comprehensive Insurance, this is the most popular voluntary cover owing to a high frequency of vehicle damage in Thailand. Type 1 insurance covers Own Vehicle and Third Party Property Damage and Bodily Injury as well as loss due to Fire and Theft and Natural Disasters like flood. It also specifically covers Window Breakage and Towing expense.

• Type 2+

  A similar cover to Type 1, but with a limit to cover for Own Vehicle Damage. It excludes Own Vehicle Damage due to Self-Accident (e.g. driving into a car park wall).

• Type 3+

  Covers Third Party Property Damage and Excess Third Party Bodily Injury (i.e. in excess of Compulsory Motor Insurance limit) as well as a limited coverage for Own Vehicle Damage due to Collisions only.

• Type 2

  Commonly referred to in other countries as Third Party, Fire & Theft, Type 2 covers Third Party Property Damage, Excess Third Party Bodily Injury and loss due to Fire and Theft.

• Type 3

  Covers the costs of Third Party Property Damage and Excess Third Party Bodily Injury (i.e. in excess of Compulsory Motor Insurance limit).

Extra covers like Personal Accident (“PA”) and Bail Bond, which covers the cost of bail if you happen to be arrested after an accident, are often packaged with the above products. Be aware in that case that you may pay extra premium even if you don’t want these covers.

You may get to choose whether to have your car repaired at your preferred workshop (e.g. dealer garage) or at the insurer’s panel of workshops. Quality of repairs may not differ between these choices but the queue to wait for repairs can and it is worth querying. Dealer garages tend to charge much higher for repairs and this may effect your premiums if you choose a Dealer Garage option.

Some providers also provide the choice of a Policy Excess or Deductible, where you contribute a portion of the repair cost in exchange for a cheaper premium. While this makes good financial sense, it is not very popular among Thais and is not widely promoted. Be aware that if you have small car damage and cannot identify the third party who caused it, there is a regulation that you will have to pay a THB 1,000 mandatory excess. This is regulatory move to try to discourage very small own damage claims (e.g. a small scrape on your wheel because you hit the curb parking) in Thailand.

If you buy a new car in Thailand on finance, you may find it a challenge to choose an insurance brand that you know and are comfortable dealing with in the event of a claim. This is because prescribed insurance packages are often force-sold together with car and finance. Given little choice, new car buyers can end up with expensive insurance in the first year, even if it is promoted as “free” by the dealer. Whatever the promotion, actually all car insurance policies in Thailand have a real premium charge under the regulatory tariff, which must be stated on the Policy Schedule and this premium will include commission payable to the seller. If it is promoted as “free” insurance, the cost will recovered from other charges to you.

If you are paying cash for a car, are buying a second hand car or are coming into the second year of new car ownership, you will find much greater freedom of choice of car insurance.

Motor insurance premiums

Below is a simple table of factors that insurance providers in Thailand usually take into account when calculating the premium. These are not rules. Insurers will use judgment for each insurance application.

Insurers in Thailand give most weight to the factors relating to the vehicle itself:

CAR PROFILE	TIPS
Model Type	Sports cars cost more to insure than regular sedans
Engine Capacity	Bigger engines result in bigger insurance premiums
Engine Type	Turbocharged engines are more expensive to insure
Year of Manufacture	While older cars mean lower premiums, some providers do not cover cars that they feel are ‘too old’.

Some providers will seek more detail about drivers and will use statistical experience to provide more accurate premiums. Below are a few simple examples, although many providers in Thailand do not currently emphasize driver risk factors.

DRIVER PROFILE	TIPS
Named Drivers	if you specify all drivers, you will get a more accurate premium, depending on their profile.
Age	Age and driving experience should lower premiums.
Gender	As groups, men and women can have different risk profiles. Men tend to be higher risk drivers.
Family Status	Drivers with dependents tend to be lower risk drivers than drivers with no dependents.
Vehicle Usage	Those who use their car for private use and commuting to and from work tend to be lower risk than those who use their vehicle during work and for commercial purposes.
Claims History	Drivers with a history of high claims may have to pay much higher premiums, or could be rejected altogether.

No Claim Bonus (NCB), or No Claim Discount (NCD)

If you have a No Claim discount in your home country, a Thai insurer may at their discretion, consider this. “NCB” as it is referred to in Thailand, should provide a discount between 20-50%. Unfortunately, there is no NCB database in Thailand and NCB doesn’t necessarily transfer from one insurer to another if you change providers.

Buying Online

A new trend is browsing for and purchasing car insurance online. This enables you to check and compare covers and pricing and is increasingly popular owing to its direct and instant nature. There can be an added benefit for non-Thai speakers that online information may be presented in English. In the case of DirectAsia.com, there is also English speaking support on the Customer Care hotline.

Do some research on the internet, call up or visit auto insurance providers and compare policy terms to ensure that you are choosing a plan that matches your needs at a fair price.