Motorists always accuse the insurance companies of increasing of motor insurance premium every year. Being an independent adviser and dealing with nearly all insurers in Singapore and many claims, I know deeply that it is your fellow motorists are the ones to be blamed.
Not to mention the accidents caused by merely reckless driving like recent Rochor road Ferrari crash motor insurance claim, a lot of insurance losses are due to fraudulent claims.
“Aviva Singapore, estimates that around a fifth of all car insurance claims it receives have been inflated to varying amounts. NTUC Income said it believes that more than half of the injury claims and about one-third of the property damage claims it receives are, to varying degrees, inflated.”
In 2008, GIA introduced the Motor Claims Framework, which requires motorists to file claims with their insurers within 24 hours of an accident. This may have reduced the inflated claims for damaged vehicle but as mentioned in today’s straits times article “Insurers to combat fraudulent claims”, “an increasing trend of motorists making inflated claims for personal injuries, instead of damage to their vehicles as was prevalent before, since new rules were introduced that allowed insurers to inspect vehicles before paying out a claim.” “There have been cases in recent years of motorists making false or exaggerated personal injury claims of as much as $1 million after being involved in relatively minor accidents.”
In a recent case that went all the way to the Court of Appeal, a motorist lodged a claim of almost $2 million after a minor accident.
Another driver had accidentally reversed her vehicle into the back of his car at 15kmh. The driver said the whiplash from the accident had caused permanent disabilities that made it impossible for him to continue working as a teacher. Eventually, the Court of Appeal ruled in January that since there was little evidence of the severity of his injuries, he should receive only about $90,000.
Insurance is like a company, every policyholder is a shareholder. If the policyholders do not act responsibly, eventually everybody would suffer. In recent years, there have been inflated medical bills against medical insurance. I am very worried health insurance will suffer the same destiny. I will blog about this topic next time.