Sunday, November 18, 2012

Unjustified voiding of motor policy

While driving in Malaysia in 2007, Mrs Lee’s car churned out black smoke at the engine bay. She stopped at a motor workshop and was advised to replace the extractor. She was assured that many cars from Singapore had made similar replacements at the workshop and they did not have any problem.

She agreed to the replacement of the extractor and was able to pass the annual vehicle inspection test, required by the Land Transport Authority, for the next four years.

In August 2012, she gave permission to her 32 year old son to drive the car. The son hit the rear of another vehicle. After lodging the accident report, Mrs Lee’s insurer discovered the replaced extractor and voided the insurance cover on the grounds that it was an unauthorized replacement. Mrs Lee was previously insured with another insurance company and had changed to the new insurer in June 2012.

The insurer rejected the repair of Mrs Lee’s car and also repudiated liability for the claim from the third party, which amounted to $9,500.

I found the voiding of the policy to be unjustified as the repair was carried out by a proper workshop in Malaysia and was necessitated due to a problem with the engine at that time. Furthermore, it had passed the vehicle inspection test conducted under the Land Transport Authority rules for the following four years.

It seemed to be quite common for an insurer to repudiate liability on questionable grounds, leaving the motorist in a difficult position.


Anonymous said...

Mr. Tan, that is why in my whole life I only bought the medishield to manage the larger health bill if happen and the compulsory motor insurance. Everything else is risk management and self insurance cause I never trusted the insurance companies.

Lye Khuen Way said...

Indeed, as I griw older and hopefully wiser, I have cultivated an aversion to most Insurance sales talk.

Car insurance in Singapore is getting a bad image and deservingly so.

Why the Association and the Authority do nothing is beyond me.

Am begining to assume that some parties must be benefitting from all the hassle and high premiums.

JW said...

I heard some of the cheaper motor insurance that you buy online are cheap not only cos they bypass agent fees, but also cos they have alot of clauses stating what you cannot claim on. Any modifications to your car is one thing. Since its in black & white, highly doubt Mrs. Lee can do anything about it.

That's what you pay for things that are too cheap without first checking out all the T&C's yourself.

Unknown said...

Can she bring the case to FIDREC? since this is the Agency they claimed to allow man on the street to seek justice for wrongs done by Insurance and banking industry?

Kin Lian Tan said...

The insurer had replied to my request to review the voiding decision. They told me that the car was illegally modified, and this was a breach of warranty of the insured. The insurer probably suspect that it was done recently. So the policyholder will need to provide evidence of her statement that the replacement was done in 2007.

Shanice said...

Mr Tan, what if I bought a second hand car and didn't know there is modification in the car and insurance rejected my claim, are you able to help?

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