What are you views on the no-fault motor insurance, that is proposed by the Consumer Association?
REPLY
I sent the following views to the Straits Time. The journalist mentioned it in his report.
There are two types of third party claims and they require to be dealt with differently.
a) Injury claims
For injury claims, it is useful to have a "no fault system" to compensate the injured party, similar to worker's compensation. Here is the experience of such a system used in Sweden. It allows for the compensations to be paid more promptly and fairly, and reduces the litigation cost. See this article in my website:
b) Damage claims
For damage claims, a better solution is for the regulation to require a motorist to lodge a third party claim directly with the insurance company, prior to arranging the repair of the vehicle. The past practice was that the third party will arrange the repair the vehicle with his workshop (who can inflate the claim) and then get a lawyer to lodge the third party claim against the insruance company (hence, adding up the litigation cost as well). (Note: I am not sure if the Motor Claim Framework introduced last year has already addressed this matter).
If the third party damage claim can be put on a proper framework, there is no need to change to law to introduce a "no fault" system for damage claims.
2 comments:
I wish to share my experience on claiming motor insurance.
In Apr 2008, I had an accident; a van knocked the rear of my car.
My car was towed away by the traffic police while I was sent to NUH by an ambulance for a check-up, as I felt unwell.
In Jun 2008, the traffic police sent me a letter to conclude the van's driver was at fault and he has demerit points. This case was closed.
To cut short, I received my injury compensation in late May 2009,
which is more than a year after my incident AND after much pressing on the law firm to settle my case asap. Both my car and the van were insured under the same insurer.
To make matter uglier, the lawyer fees though not payable by me, was more than my injury compensation.
My "complain" is : I pay my motor insurance premium promptly. Why does my compensation come so late?
I asked around and was told this was common and expected. What kind of world are we living in?
starlight
In my own opinion, i prefer to have this concept of insuranace called "Fixed-coverage motor insurance". How it works is consumer will pay the premium accordingly to the amount he would like to insured his car. In event of an accident, he can claim up to the amount insured. Whatever claim over the amt, the driver will have to cough out. This is similar to buying a health insurance. In this way, errorous driver cannot claim more than insured and insurance company can adjust the premium accordingly to sum insured. This scheme will allow flexibilty for consumer to choose. Eg Person A may want to insured $10,000 for his car. His premium per yr may be $3500. Insurance company may vary the insured sum and premium accordingly. At least this scheme is fairer than the no-fault insurance, whereby whether the driver is innocent or what, he has to pay for higher premium should his car has an accident.
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