FAQ on Motor Insurance Issues
1. What should you do if the other party fails to report a non-injury motor accident to his insurer?
You may contact the third party’s insurer, which will then remind its policyholder to file an accident report. If the policyholder fails to file the report despite his insurer’s reminders, the insurer will inform the Traffic Police, which will then remind the policyholder to file the report.
2. Why do insurers require an accident report from their policyholder before acting on a third-party claim?
Insurers require an accident report from their policyholders or insured drivers before acting on a third-party claim to make sure the claim is valid and their insured driver was indeed involved in the accident. Then they can investigate the accident to determine if their insured driver was at fault in the accident and to what extent they are responsible for it.
3. Does your insurer need an accident report from the other party if it is also the insurer of that party?
Yes, it does. The motor insurers review accident reports filed by their policyholders or insured drivers and the third party to establish which party is at fault, and then determine the liability to be assumed by each party. Without such reports from both parties, insurers face a great challenge to assess liability from each party.
4. What happens if a policyholder fails to make an accident report?
Policyholders face serious consequences if they fail to file an accident report. As this constitutes a breach of the insurance policy condition, the insurer can repudiate liability, resulting in the insured’s loss of protection under the policy. Insurers may also cancel the policy, decline to invite renewal of policy or confiscate the NCD entitlement of policyholders if there is any delay in reporting accidents.
5. Can an insurer refuse liability because the policyholder has not reported the accident?
The law governing third-party risks arising out of the use of motor vehicles is the Motor Vehicles (Third-Party Risks and Compensation) Act 1960 (“MV Act”).
The MV Act stipulates that insuring against third-party death or bodily injury is compulsory, and an insurer cannot refuse liability on the ground that the policy holder has not reported the accident if the third-party’s claim is for bodily injury or death.
On the other hand, the MV Act does not require compulsory insurance for third-party property damage. For third-party property damage coverage, an insurer’s obligations arise solely from the contractual relationship with its policyholder. The insurance contract requires its policyholder or insured driver to report the accident to the insurer.
6. What should you do if you remain unable to pursue insurance claims?
Victims of road traffic accidents who remain unable to pursue insurance claims may file a civil claim against the other party or claim compensation from their own insurer.
Making accident reports does not necessarily lead to your being categorised as a high-risk driver and to you being charged higher premiums. Your premium rates would be affected if you are at fault for any of these accidents.
It is not an industry wide practice in Singapore for insurers to charge the elderly and senior citizens higher premiums or refuse to insure them simply because of their age.
An insurer’s decision not to provide coverage to a customer would largely stem from that customer’s poor claims experience rather than his age.
In fact, there are insurers who provide special insurance plans to cater for senior citizens. Do shop around and compare.
While different insurers have different policies on non-renewal of motor insurance policies, they generally refuse to renew a policy when a motorist has:
- recorded a number of traffic violations in a short period of time;
- a bad claims history (e.g. multiple at-fault accidents in 1 policy year);
- been found to be driving under the influence of alcohol / driving while intoxicated; or
- not reported an accident to his insurer and/or refused to co-operate with the insurer following an accident.
Vehicle owners are advised to approach motor insurers for quotes directly. They may also appoint an insurance broker or agent to help arrange the quotes and advise them.
As an industry practice, an insurer will not act on your behalf to file a third party claim, but can assist you to file a third party claim via their approved reporting centres.
Therefore, you are encouraged to lodge a damage claim under your own policy. After you have been indemnified, your insurer will commence recovery against the other driver’s insurer if it can be proven that the driver is fully liable for the accident. Your insurer will not dock your No Claim Discount at next renewal if recovery is successful.
The GIA can only assist claimants by providing guidance and instructions on what they can do or where they can seek recourse under such circumstances. We do not provide mediation services between consumers and our member companies. Instead, claimants should approach the insurer concerned directly, or the Financial Industry Disputes Resolution Centre Ltd (FIDReC)
High third party claim costs could be due to one of the following reasons:
- There may be hidden damage not visible externally.
- Damaged items are replaced instead of repaired for newer cars.
- Besides the repair costs, the claim costs could include legal fees, loss of use and third party survey fees.
Generally, third-party damage claims are settled within six months. For more complex cases, insurers will need more time for investigations.
You can assist in speeding up your claim processing by providing the following to the insurer:
- Accident report, Police report
- Information regarding the accident scene, including photographs, videos and other evidence
- Any other documents supporting your claim
You may contact the insurer involved to follow up on the status of your claim. If the processing time exceeds the usual period, it is likely that the insurer is further investigating the case before deciding on your claim.
You may contact your appointed representative. They will be able to provide you with details of the settlement sum.
A typical motor insurance policy would restrict the use of the insured vehicle to social domestic and entertainment purposes only. Therefore, if you rent out your vehicle in return for rental fees, you would be acting in breach of your policy conditions. This breach of policy conditions entitles your insurer to void the policy, and deny claims for damage and injury due to an accident arising from the use of the vehicle.
It is normal for motor insurance policies to exclude coverage if your car is rented out. You are advised to inform your insurer and request for coverage if you intend to rent out your vehicle for a short duration. If they accede to your request, an additional premium may be chargeable.
Private-car policyholders should be aware that their insurance policies have a "Limitation to Use" condition, which restricts usage to social, domestic and pleasure purposes.
If you intend to use your car for carpooling purposes under the Road Traffic (Car Pools) Exemption Order, you are advised to check with your insurer if your existing private car policy includes coverage when the car is used for carpooling.
While a typical motor insurance policy covers you against legal liability from an accident (e.g. death or bodily injury and damage to third-party property), it does not provide commercial coverage. Some couriers and companies in Singapore commonly use motorcycles for delivery purposes - but often they do not have commercial coverage for their fleet.
What are the risks to them?
- Their insurer may repudiate liability if the insured motorcycle was used for commercial purpose.
- The company and/or driver may be liable for losses if the driver is found negligent.
- The insurer may cancel or refuse to renew the policy if the motorcycle was used for commercial purpose.
- There will be further complications to claims if the motorcycle accident involves a Malaysian-registered vehicle.
Couriers and other companies with fleets of motorcycles can have a contingency policy arranged to provide them with public liability coverage. A number of Singapore insurers can also offer them commercial coverage for their fleet of motorcycles. All they have to do is approach a GIA member who offers motor insurance to arrange a policy that can cover the fleet for commercial use.