Road accident injury claims rising, questions raised

Claims are sometimes larger than those for repairs, and they are driving premiums up

Motor insurers, which have been battling the scourge of inflated repair bills for years, are now facing a new monster: injury claims arising from road accidents, and not all of them appear to be genuine.

Industry players said the claims, which are sometimes many times larger than those for vehicle repairs, are costing insurers an arm and a leg in payouts and driving premiums up for motorists.

One leading insurer said it received on average 300 injury claims a month last year - more than double the 140 a month it received in 2006.

Another top motor insurer, Axa Insurance, said its volume this year has already exceeded last year's by up to 20 per cent, with whiplash, cuts and abrasions forming the bulk of claims.

'There is a worry about a rising trend in orchestrated injury claims,' Mr Derek Teo, president of the General Insurance Association (GIA), told The Sunday Times. 'Very often, they would pertain to whiplash, which is hard to substantiate or refute.'

Last month, the GIA announced an initiative which it hopes will reduce inflated claims. From next month, motorists involved in an accident will have to inform their insurers within 24 hours.

Industry sources said this was because people were less likely to lie or would have fewer opportunities to collaborate with workshops to submit inflated claims within the first 24 hours of an accident.

But observers pointed out that the new plan would not address rising injury claims, which were sometimes filed days after an accident.

Police statistics show that over 44,000 people were 'slightly injured' on the road between 2003 and last year.

The annual figure crossed the 10,000-mark last year to hit 10,250 - 30 per cent more than in 2003 and outpacing the 16.5 per cent growth in vehicle population since then.

Private investigator Louis Amalorpavanathan of GLA Claims Adjusting and Investigation Services said injury claims have shot up over the last year. He blamed lawyers.

'Most insurance companies are now encouraging direct settlement for repair claims, bypassing lawyers who used to be involved,' he said.

He explained that this resulted in less business for some lawyers who specialised in accident claims, prompting them to scour for injury cases to represent.

Lawyer Monoj Kumar Roy, 47, had this to say in retort: 'That's an unfair statement. Many people in the past did not know they could claim for injuries. How can lawyers drive injury claims if there are no injuries?'

He added: 'Admittedly, there are odd cases of fakes. If insurers think there is no injury, they should fight the case and get it thrown out.'

Another new development could affect the business of lawyers. As of last month, disputes arising from non-injury motor accident claims below $1,000 are no longer heard in court. Instead, they go straight to the Financial Industry Disputes Resolution Centre (Fidrec), an independent resolution centre set up in 2005.

The Sunday Times understands the $1,000 cap may be reviewed - and possibly raised - in future.

According to industry sources, the Subordinate Courts may soon make a similar move to outsource injury claim disputes to Fidrec because the number of such cases had exploded.

The Subordinate Courts said a workplan rolling out soon would include changes in this area, but declined to go into details of injury claims being handled now.

The move to divert non-injury accident claim disputes to Fidrec is expected to shave about 1,000 cases off the courts' workload.

By Christopher Tan, Senior Correspondent