I read a report that an insurance company increased the premium for motor insurance by 400% on its renewal. The motorist is not able to get another insurance company to accept his risk. Is it fair for the premium to be increased by so much?
REPLY
The increase of 400% is excessive. The authority should set some reasonable cap on the increase in premium on its renewal. An increase of 100% is already too high. The customer should not be placed at the mercy of the insurance company. The consumer should lodge a complaint with the Consumer Association (CASE) to take up this matter.
An alternative arrangement is for MAS to set up a residual market (or pool) for motorist who are not able to get insurance from the standard market. The premium rate for the residual market is higher, but cannot be excessive. The risk is the residual market is shared by the insurance companies in proportion to their share of the market.
If insurance company receive million of dollar in motor premium each year. They can open their own workshop and employ their own staff to regular the repair cost. Why leave to the authorise workshop and blame on each other?
ReplyDeletestop insuring with ntuc to avoid this problem in the future.
ReplyDeleteIt can be misleading to say the premium has increased by 400%, if the motorist earlier enjoyed an absolute premium of eg., $400?
ReplyDeleteHe would then be paying only $1200, which is much lower than a lot of motorists here are paying.
I do however agree with TKL's suggestion that we need a residual market (govt, quasi govt or combined GIA pool, etc) for motorists who cannot find cover.
What cause for the steep hike in motor insurance premiums?
ReplyDeleteMore road accidents which resulted more cases of repair for vehicles and compensation for victims? More paperwork in dealing with such claims? Higher cost in repair of vehicles?
Apparently the reason cited for the hike in premium was due to the higher cost in the repair of vehicles. Are the cost of repair justified? A simple dent in a car easily cost a few hundreds if not into thousands. What sort of world are we living now?
starlight
If I remember correctly, the premium for last year was $800 and it increased to $4,000 on renewal. This increase is excessive.
ReplyDeleteFree market. Go to another insurance company that offers a better deal.
ReplyDeleteIMHO, many factors attribute to the motor premium fiasco, AND this will not and never will change unless MAS do something. As of now, those scholarly guys sitting there are clueless to insurance too!
This is a controlled market, not a free market.
ReplyDelete2 claims for past 3 yrs, choices are very very limited. Probably only 3 or 4 bigger companies will accept the case.
3 claims for past 3 years, good for you if your existing insurer invites you for renewal.
How do I know? I'm responsible for reporting the bad news to car owners.
"Dear XXX, thank you for your interest in our service. Unfortunately, all companies have declined to provide a quote and you may have to transfer car ownership to your wife.
Sincerely,
YYY"
It is as clear as day that something crooked is going on in all these accident claims leading to high charges. I am sure the insurance companies know it too but they feel powerless to remedy it but instead chose the easier way to penalise honest drivers to make up the shortfall. There is no sense of justice but just administrative and operational convenience. This is not leadership but merely management of the problem, knowing that drivers have no choice but to pay up. These are the cEOs quality we are getting nowadays inspite of paying high salaries for them to be tortoises. They only know how to appear on AGMs trying to look intelligent and repeating the lies that they are looking after policyholders' interests and opting to represent policyholders.
ReplyDeletePui, Pui, Pui. No shame foreigners behaving like locusts!
Expat CEOs only here to stay for a few yrs before moving on to bigger things, why bother to stir the pot. U wouldn't if you were in their shoes.
ReplyDeleteLocal management of each insurer has their own agenda (tell that to AIG, AXA, Income), and each boasts to have good actuarial data to analyse and manage the claims.
However, one key issue is also the underwriters putting out the motor quotes, are clueless about claims. They are just inexperienced executives in charge of adminstration/operations.
The truth is, this industry is not united (NOT A CONTROLLED MARKET) to be able to come up with a fool proof solution. Maybe, something like "Public Tranport Council" with all stakeholders involved, then we can really talk about reforms...
It does not really matter whether it's a free market, controlled market, non-united, united or messy market. If the insurance companies can continuously passed their higher claims costs in the form of higher premiums to customers, there is no incentive for them to control their costs.
ReplyDeleteThey blame workshops for artificially inflating the repair costs, then why not report them to the police for fraud? They blame lawyers for high legal expenses, why pay when it's not justified? Some even blamed drivers for being reckless, which driver would want an accident?
After finger pointing and not doing much to tackle the real problems, they just declared that they need to increase the premiums to cover their losses.
For the past few days, the topic is stirred up again and again. Some solutions are offered but none of them are substantial. Even if there is, do not expect any party to quickly enact it. After all, workshops, lawyers and insurance companies stand to gain when premiums shoot up. The only losers are the innocent drivers.