Wednesday, February 27, 2008

Loss of No Claim Discount

Dear Mr. Tan,

Last year, my insurance company settled a third party claim without my consent. They penalised me on my No Claim Discount. I find this to be unfair. How can I take up this matter?

The No Claim Discount is given only if the insurance company did not pay any claim during the past year. If there is a third party claim, the insurance contract specify that the NCD will be lost.

The only way to keep the NCD is for you to pay the claim from the third party. You can ask your insurance company about the amount of the claim, and decide if you wish to bear it.

The insurance company will protect the interest of its policyholder. They will reject the third party claim if their own policyholder is not liable. They will only pay the third party claim if, based on the circumstance of the accident, their policyholder is likely to be at fault. They use standard market protocol to determine the party at fault.

If you feel strongly against the payment, you can ask the mangement to review their claim and see if they have paid the third party claim wrongly. After the review, you have to take their decision as final.

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