fbpx

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.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • Hi Ivan
    “it is the innocence motorists who bear the premium,”
    Exactly, therefore motor-car insurances has become “a cowboy business”. Cheng Hoo Boh Chap and it is really not worth your time and money for “innocence motorists” to go to court to establish your rights in a fraudulent motor accident claim by crooked third party & workshop.
    Even if innocence motorist wins the court case, you are prevent by “Laws” to claim any compesations for lawyer’s fees, etc… if i am not wrong.
    Therefore motor-car insurance business has become a “cowboy business”.
    Partially, it’s because “Cheng Hoo Boh Chap Sze Gin Tai Chi”.

  • Ya..blah….. Do you think the Insurances Companies really care? In the end who pays? Is it the insurances or the motorists? Especially the law-abiding ones (motorists). And what did our PAPYs do? Nothing. Why? “Cheng Hoo Boh Chap Sze Gin Tai Chi” (No Profit No Talk. No Money No Talk)

    • Hi, Tony

      I think you have rightfully pointed out that in the end it is the motorists who bear the premium, but that is the nature of insurance. insurance companies are not charities, they are out there to make profits.

      Regarding the point that the law requires you buy motor insurance, it is for the benefit for the victims and public good. that is why only “Third Party” insurance is compulsory. you can choose not to insure your own car. I have discussed this in another article.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
    >