How an insurer created a mess

Motor insurance premiums have been going up and up over the years. There is very little that policy-holders can do about it. Insurers say they are losing millions in claims and the only way they can recover their losses is to make their customers pay for them.

I have no problems with that except for one proviso...the quantum of premium increase has to be fair. But herein lies the problem: Who decides what is fair?

Unfortunately for policy-holders, it is the insurer. What makes it so unpalatable is that he does not explain to us how he arrives at the new premium amount we have to pay. All he tells us, year after year, is that motor claims have skyrocketed and therefore we have to share the misery.

Over the past years, there have numerous discussions in the media about how to curb excessive motor claims and other abuses. Various interested parties have been involved -- the insurers, the motor workshop representatives, lawyers, doctors, the police and of course the motoring public.

To date, I have not heard of any solution or pragmatic action plan to tackle the problem. The insurance regulator meanwhile has remained strangely silent. With the status quo, however, the poor motorists continue to bear the brunt.

I would like to relate my experience with my insurer, the Royal and Sun Alliance Insurance (RSA), to show, as an example, how the Singapore motorist has been taken for granted for much too long.

I was involved in a motor accident in early 2008. I took photographs of the scene and reported quite comprehensively on what happened. Then I told my insurer that on no account should they settle the case without referring to me as I believe I was not to blame.

Imagine my chagrin when I found out months later that my insurer had gone ahead and admitted 90 per cent liability without informing me.

But what takes the cake is this: My insurer had given the wrong location of my accident in the settlement letter -- PIE instead of Gilstead Road.

With everything signed and sealed, what was I to do? I decided that I had to fight back. The battle took me many man-hours. It included going to the scene of the accident with a young RSA officer to show him exactly how it happened and why I was not at fault.

After many email messages and telephone calls, RSA finally conceded. It rescinded the settlement agreement and got its lawyers, Island Law Corporation, to counter-claim from the other party.

The upshot of it all was, the other party admitted to 90% liability in August last year. RSA got the bulk of the settlement money and I received my uninsured loss of slightly more than $1,000 PLUS the satisfaction of seeing justice done.

I must commend the Island Law Corporation for doing a fine job. However, I cannot say the same for RSA. What saddened me was that, throughout more than a year of to-ing and fro-ing with the insurer, it did not have the courtesy of apologising for the mess it had created for me.

A BOU-QUET for Island Law Corporation and a BOO-QUET for RSA.

***WATCH out for the next chapter of my insurance saga -- WHAT'S THE USE OF INSURING AGAINST THE LOSS OF NO-CLAIMS BONUS?