===============Hi BuriramUnitedFC, I am not so much concerned if the insurers choose to deny liability, car owners/ drivers are not teenagers who don't have any ability to negotiate with the authorities- they can also seek advise from CASE, The Financial Industry Disputes Resolution Centre Ltd, free legal clinics (Hougang, every 3rd Tuesday of the mth [pdf][SBY-news]), their own personal legal council should they choose so- I think that insurance companies should compensate in so far as they are contractually liable to compensate and NOT to compensate (after having complied with all applicable laws, especially 'Motor Vehicles (Third-Party Risks and Compensation) Act (CHAPTER 189)').Originally Posted by BuriramUnitedFC (16August2012)
The reason for so is to prevent motor insurance premiums from escalating unnecessarily and so that those who really need to use cars- old, handicapped do not find motor premium payments/ charges too expensive/ burdensome.
To understand the principle of motor insurance, one must understand the context in which it is licensed in Singapore- principally by the government in context of 'Motor Vehicles (Third-Party Risks and Compensation) Act (CHAPTER 189)' , a simpler explanation of which may be found at Victim wins civil suit against Ionescu or within this forum at 'Ma Chi's family sues insurers AXA after they withdraw coverage for deadly 'collision (post#28)'- principally that of the law requiring that 3rd party victims be adequately compensated regardless of the driver's ability to pay out personal compensation- the requirement "The whole idea is to make sure the victim is not left uncompensated. The insurer reserves the right to go after the driver to recover that amount."[Mr K Anparasan, KhattarWongLLP]. Anything in excess of the legislated requisite 3rd party motor insurance (e.g. the misnamed 1st party insurance/ comprehensive insurance) is thus for other 1st party damages/ liabilities that are generally unpreventable despite reasonable care e.g.: U are victim of car vandalism/ thief/ you are victim of a hit and run accident, floods sweep your car away, car despite proper car and maintenance caught fire after the warranty period, windscreen broken whilst driving on public roads/ by highway robbers, accident on M'sian roads with cow, zebra/ horse etc causing damage to car due to unavoidable accident despite traveling with speed limits, car skid due to new oily patch on road that was not demarcated e.g. sabotage etc (+at night, + car NOT speeding), accident with a bicycle- cyclist's fault but cyclist is too poor to compensate, driver of motor vehicle suffering sudden heart attack whilst driving with no warning signs/ symptoms etc etc etc.
Despite 1st party motor insurance generally being misnamed as "comprehensive", important exclusions clearly stated as follows:
You could thus read that again: "(g) any wilful act and/or wilful negligence of yourself or that of your Authorised driver."
Thus, the ordinary 1st party insurance policies are NOT meant as coverage for accidents due to speeding, DUI, reckless/ careless driving, accidents caused by shooting red lights etc etc.
Perhaps the government could impose a more fluid tax upon insurers such that any amounts in excess of 20 percent earnings (profits) from motor insurance premiums over an up to 3 yrs declaration period should be taxed at 100% annually (tax free for profits below 20%)- and limits upon the management fees for the insurance scheme from exceeding 20% of premiums collected- thus the care by motor insurance companies across the board to ensure minimal unnecessary overhead costs, insured drivers remain careful and that premiums are kept to minimum so as to remain competitive, since drivers too would be able to insurance shop for the lowest rates. Drivers too will drive less recklessly as they know insurance companies to be careful about every cent paid out.
Motor insurance being a 'public good' and compulsory by legislation, ought be run on a 'not-for-profit' basis. Likewise, motor insurance SHOULD not promote the dangerous use of cars as private entertainment/ racing machines that illicitly abuse public roads as personal F1-racetracks/ playgrounds.
PS: 'Taxes' imposed upon motor insurance companies for profits in excess of 20% of premiums p.a. should be paid to a fund that subsidizes the care, welfare/ employment etc of hit and run victims wherein no insurer can be identified to compensate for such incidents. The 20% p.a. profit cap/ management fee cap figure is just a suggestion for consideration, it may be adjusted accordingly as necessary. The regulation suggested here to reduce motor insurance premiums is necessary due to the fact that motor insurance, according to the 'Motor Vehicles (Third-Party Risks and Compensation) Act (CHAPTER 189)' is compulsory; there is in this context however, lesser need to regulate the profits of other forms of life/ personal/ healthcare insurance where the payment of such insurance premiums by individuals is NOT a legal necessity.
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