It can be shocking to many motorists when AXA just decided not to honor the motor insurance claim in the high profile Rochor Road Ferrari Crash.

In the crash, the driver Mr Ma had allegedly run a red light in Rochor Road. His car rammed a taxi, which then hit a motorcycle. The accident left three people, including Mr Ma, dead and two others injured.

In court papers filed on Monday, AXA stated that the May 12 crash was a “collision” and not an accident: “Ma Chi was doing an act which he knew or ought to have known was courting imminent danger to himself and others.” … In its court papers, AXA explained that Mr Ma had driven the car at “an extremely excessive speed”. In conducting himself in a “totally reckless and/or dangerous manner”, Mr Ma had breached an “implied term” in AXA’s policy that the vehicle should be driven prudently and not at excessive speeds, said court papers.

AXA’s counterclaim also asked for the estate of Mr Ma to repay all that AXA is liable to pay under the Motor Vehicles (Third-Party Risks and Compensation) Act to those killed or injured in the crash.

This impact of this case is definitely significant and will be the basis for future cases. On contrary to many people’s thinking, in the past, many insurers tend to be relaxed with their own rights and terms to keep a good reputation in the market. With increasing claim ratios, insurers are forced to tighten their controls to protect their bottom line.

There are many “implied terms” in an insurance contract by way of common sense. For example, an accident caused by drink driving is generally not covered. Construction worker should not be doubled as a driver.  Put sensational factors apart, insurers are really in dilemma to pay for accidents caused by dangerous driving.

I have encountered so many reckless drivers and always wonder if these people cause accidents and the insurers do not pay, ultimately it is the victims who suffer. How many of these drivers have hundreds of thousands to pay the hefty medical bills and loss of income of the victims? That is why Third Party Motor Insurance is compulsory.

On the other hand, if such behaviours are compensated by insurance, people will be less responsible for their own acts because they suffer no consequences. As a result, Singapore road will just become more and more dangerous. Having handled so many motor insurance claims, I seldom hear the insured admit their own mistakes or even care about the claim amount, all they care is if they can get cheaper motor insurance because “I will never knock someone’s car”, but as a matter of fact, they did!

Let’s see how this case will develop.