The General Insurance Association of Singapore (GIA) advises motorists against using their passenger vehicles for paid delivery services, which are regarded as commercial transactions ("Car owners moonlight as delivery drivers"; last Sunday).
Under the terms and conditions of a private car motor insurance policy, the restriction for use is limited to "social, domestic and pleasure only".
Therefore, if the driver has an accident when the vehicle is used other than permitted under the policy condition, the insurer may decline liability since there is a breach of policy conditions.
There are serious consequences which the policyholder has to bear in the event he is found to have breached the policy conditions.
These include not being protected by the motor insurance policy he bought; having to pay out of pocket for property damage and injury to a third party; not being able to get his policy renewed with his insurer and, hence, not being able to renew his road tax for his vehicle.
The GIA also advises motorists to check with their insurers whether their private car policies with standard restriction for use can be widened to cover business, apart from social, domestic and pleasure.
Derek Teo, Executive Director
General Insurance Association of Singapore
This article was first published on April 26, 2015.
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