I REFER to Monday's letter, "Minor accident turns into a shocker" (reproduced below) by Mr Kevin Chua Hock Meng. Mr Chua wrote that his motor insurance premium had increased sharply after NTUC Income settled a claim against him which he had disputed. Our records show that his car was involved in an accident in December 2007. In the accident report and in subsequent communications with us, Mr Chua disputed the claim submitted by the other party involved in the accident.

Based on this information, we decided to appoint a lawyer to fight the case in court. However, the court found Mr Chua's brother-in-law, who was driving his car at the time of the accident, to be 90 per cent liable for the accident.

Through our negotiations, we managed to reduce his liability to 80 per cent. Despite this, the total payout Mr Chua was liable for, including legal costs, turned out to exceed the initial claim amount by the other party.

The outcome of Mr Chua's case illustrates the basis for our practice to settle claims by using the most economical and effective option. In most cases, this involves settling directly with claimants instead of going through a lengthy and costlier legal process.

On the issue Mr Chua raised about his no-claims discount being lowered by 30 per cent, we wish to clarify that this is the standard industry practice when policyholders make a claim under their motor insurance policy. In such cases, there may also be premium loading at the point of policy renewal that results in higher premiums. We thank Mr Chua for giving us the opportunity to make these clarifications.

Mr Pui Phusangmook,
Senior Vice-President & General Manager,
General Insurance Division,
NTUC Income

Slight bumper incident resulted in $13k claim

I READ with interest the current debate over experiences with motor claims and the suggestion of hikes in motor premiums.

My car was involved in a minor accident in February last year in which I bumped slightly into the car in front of mine. I didn't even require a change of licence plate, but received a lawyer's letter claiming a total of about $13,000 for damages to the other car.

Bentinck Ng

Minor accident turns into a shocker

I AGREE with the arguments put forth in last Saturday's letter, "It's high time motor insurers put their house in order".

My car was involved in a very minor accident in December 2007, which resulted in scratches on the doors and bumpers of both cars. As the other driver insisted on making a report, I made mine at an independent damage assessment centre (Idac), with many photos taken of the car and all steps done according to my insurer NTUC Income's practice.

The damage was so minor that I needed no repair for my car. As the other car was of a cheaper make and older, and since it had suffered the same level of damage, I did not bother any further about it.

Imagine my shock when I received a lawyer's letter in March last year claiming more than $5,000 against me. I contacted NTUC Income and again went through the necessary steps of providing the statement. I told my insurer in writing that I totally disagreed with the claim and rejected it. In its reply, NTUC Income agreed with me on rejecting the claim. There was no further communication for the rest of the year, and I assumed things were going right.

But last month I was stunned when when my new insurance premium quotation arrived. The insurer had increased it from slightly over $400 to nearly $1,300. My no-claims discount (NCD) had been cut from 50 per cent to 20 per cent.

I contacted NTUC Income immediately. That was when I found out that my insurer had paid the claimed amount without a single communication or follow-up with me, the car owner.

Now I have to bear a more than 200 per cent increase in insurance premium and it will take years to earn back my 50 per cent NCD status. It looks like we car owners are at the mercy of ineffective insurers and errant lawyers.

Kevin Chua Hock Meng

Related links:
Insurers hurting from inflated injury claims
High motor claims a concern

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