My wife recently got into a minor accident, hitting the rear bumper of a Honda Stream.
The owner received an official quote of $1,284 from Honda agent Kah Motor's workshop for a one-day job.
My wife decided to leave it to her insurance company, AXA Insurance, to settle everything.
A few days later, she received a letter from an appointed consultant, stating that the accident was clearly her fault and that the company would proceed with negotiations with the other party.
Four months later, AXA informed my wife that it had successfully reached a "final settlement" with the claimant for a sum of $4,277.
It was a shock, because the quote from the authorised distributor workshop had been only $1,284.
The breakdown given was $3,343 (repair works), $560 (loss of use of the car) and $374 (surveyor fees).
The insurer said that the settlement was justified as the amount was brought down from $9,947.
Is there sufficient transparency in the motor insurance industry here?
It is not unreasonable for consumers to request greater transparency from their insurance companies.
After all, insurers are supposed to be acting in their customers' interest.
For instance, do we know the amount of insurance coverage we get when we pay our premiums?
The insurers' standard reply is that it covers the "market value" of the car.
Who determines this value?
In an accident claim, our insurance company and its designated workshop usually asks that we claim against our own policy.
It would then try to claim against the other party, which may result in two parties sharing the cost of the damage.
Most insurers also rely on independent surveyors.
All this is done without input from the consumer and without his knowledge.
It would be good if the authorities reviewed procedures to prevent price-fixing and minimise grey areas where questionable decisions are made.
Consumers need to know that their insurance companies can be trusted and that they are working in their customers' interest.
Kenneth Kong Kitson
This article was first published on October 27, 2015.
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