Friday, March 26, 2010

ST Online: Premium questions for motor insurers

MR PAUL Chan's Forum Online letter on Wednesday ('More accountability needed from motor insurers')
raises two less known points about the motor insurance industry.


The first.. There is no mandatory insurance required for property damage, including damage to motor vehicles... So it may be timely for the Government to step in and provide the necessary regulation.


It is unfair to consumers who are required to take up third-party injury insurance by law, and are taken advantage of by insurers who build and bundle an expensive insurance product because they know consumers have no choice but to buy it.


Second....motor insurers should factor in and disclose the investment income derived from premiums collected
when justifying premium increases for a better understanding among consumers.


Peter Lo
http://www.straitstimes.com/STForum/Story/STIStory_506672.html
Posted by at

4 comments:

Anonymous said...

And the real story here is that CASE (Consumers Association of Singapore) is its usual quiet self.

March 26, 2010 7:46 PM
symmetrix said...

Sorry, but I do not understand the 1st pt raised by Peter Lo. I thought the Motor Vehicles (Third-Party Risks and Compensation) Act covers liability not only for death or serious injury of ppl outside the car, but also of outside property damaged. Eg if a car hits and damages a lamp post, 3rd party insurance policy will pay for the damages.

3rd party insurance is the minimum protection a motorist needs. If this does not cover outside property damage, then who pays for it?

What if the 3rd party property damage is very costly eg car landing on MRT track an damaging a train. Is the motorist expected to pay for the train damage from his own pocket? 3rd party insurance should cover this.

March 26, 2010 9:32 PM
financialfreedom said...

Good suggestion by Peter Lo.

I have been paying for motor insurance for the past 3 years and it seems like my insurance premiums always remain the same at around $1K+.

March 26, 2010 11:12 PM
Anonymous said...

The insurance companies has got no incentive to reduce cost, because this is a complusory product, as such if the cost of managing the product goes up, it can be easily be passed on to the customer and the customers can "bitch" about it but still has to buy it!

Therefore, what is the root cause? High level of claims? Fraudalent claims? No communications between stakeholders- lawyers, workshop, members of GIA?

The answer is the paymaster -ie the insurance companies! Their supply of funds is ever present, as such no motivation/need to control cost!

In this instance, you need the hand of the government to "direct Traffic", in addressing the industry wide problem of claims management.

March 27, 2010 6:11 AM

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