New Motor Claims Framework - Rationale and clarification

The new MCF has raised a lot of questions among all insurers. Though there was discussion among the GIA committees since months back, but a lot of grey areas and doubts still lingered on the minds of insurers from what I heard.

However rough and tough the road ahead for implementing this measure, it seems to be one of the last straw for Monetary Authority of Singaore (MAS) and General Insurance Association of Singapore (GIAS) to implement it. The reason is simple: underwriting losses are simply not acceptable. The catalyst should be the S$103 million losses incurred in year 2007 by insurers which brought back sad memories of the year 2002.

It doesn't help further by the known fact that many claims are inflated, be it proerty claim or bodily injury case. Take for example, you are involved in a minor accident and at the scene of the accident, both parties didn't suffer any visible damage on the vehicles and neither parties are injured. Weeks later, you received a writ of summon from the Third Party lawyer seeking compensation for S$5,000 repair cost and over S$10,000 in injury claims. Note, this is NOT uncommon.

Inflated claims translate to higher premiums. But, it is not fair and it is not right to insurers and consumers. Thus, the new MCF, if successful, should lower the severity of claims sustantially. Maybe by a good 30-40%.

So, let's keep our fingers cross and comply with the MCF for now. It's a win-win situation in the long run.

Last but not the least, I'll just reiterate on the non reporting implication. Your NCD will step down by 10% for each non-reporting accident. So, if you have 2 non-reporting accident in a policy year, your NCD will step down by 20%.

New Motor Claims Framework

If you have not heard of the new Motor Claims Framework (MCF) initiated by General Insurance Association of Singapore, I would advise you to lend me your ear for a while. This is because the new MCF will require some changes in accident reporting for all motorist.

This new ruling will commence with effect from 1st June 2008.

What are the requirements? Well, this new ruling requires all motorist to report to their insurer's approved reporting center (ARC) with their accident vehicle within 24hours or the next working day . This is irregardless whether or not the vehicle is damagd or whether or not there is any possible claim.

Now, failure to comply will result in insured losing part of his No Claim Discount (NCD) and prejudice their claim. How about that? The GIA termed this as non-reporting NCD.

So, if your NCD is 50% on now, on renewal, it will step down by 10%. As such, the renewal NCD will be 40% only. One thing to note is the accident NCD will apply first before the non reporting NCD. As such, if you have 50% NCD currently, and there is a at-fault claim against your policy, your NCD will become 20% on renewal. Due to the non-reporting, your NCD will drop further to 10% only.

So, if you do not want to jeopardize your claim or affect your NCD, the only way is to comply with the requirement. Do check with your respective insurers on the list of approved reporting centres. Most of the time, the insurer's authorised workshops are also the approved reporting centres.

If you are interested to find out more of the rationale behind this new MCF and more, watch this corner again!

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

7 Things to Know Before Filing Any Car Insurance Claim

The aim of motor insurances is to cover all car costs that happen from any undesirable events, which is an accident. You pay up the rates, nevertheless once your car is damaged, you are afraid of the higher insurance premiums because of the filed claim.

This is oftentimes related to the motor insurance policies, specially the exceptional conditions that are enclosed inside. Thus financial consequences commonly are applied in claiming it which could be surprising.

The followings are 7 things that you should acknowledge before you file any car insurance claims.

1. Car Insurance Policy Renewal

Normally, insurance firms publish policies which can be renewed frequently. Yet, the company can choose not to renew the policy when the existing term ends. The decision taken are affected by many factors, therefore there are no solid rules whether the policy is going to be renewed or not. Still, the general rule is that previous accidents and claims do affect this decision.

2. Payment for the claim

Mostly, the insurance companies want excess payments for the claims. This can be accomplished by a one-time-payment or pay it by installments. But, it is advisable not to file a claim and paying the cost by yourself if the claim is small.

3. Claim Penalty

No-claim throughout the year could lead to a bonus given by your insurance company, which is a discount of your motor insurance rates. This means that filing a claim might lose part or even all of the bonus. It is suggested to obtain in-depth information before buying any car insurance policy. You may ask the insurance company representative to get a better understanding of the policy. This includes the claim penalty, non renewal guidelines and the no-claim bonus.

4. Factors of Accident

The fact is that if accident happens because of your fault, then you might get your policy dropped, or at least, getting a higher increase rate as the penalty. But, minor accidents might get a 'forgiveness'. This depends on the claim numbers and the attributes of the person himself, such as the history of tickets and accidents as well as whether he is drunk driving or not.

5. Report on Accident

It is recommended to file a report to your car insurance company and police department whenever any accidents happen.

The reason for this is so that damages, injury and evidence can be assessed thoroughly as soon as possible.

Failure to do so might result in the the investigation delay and could even lead to unable to prove that you are not at fault.

6. Garage Cost

Most policies do not cover the cost of storing your car while it is waiting to be repaired. The garage cost alone can add up to a remarkable amount, especially when the claim is being assessed.

To prevent this, you can obtain an agreement with the insurer about who is going to pay the garage costs. Of course, having your own garage at home to keep your car.

7. Contact your agent

Last but not least, always ask your agent to get the best advice on what should be done and what should not. This is since the fact that each insurance company has different rules and features.

Article Source: http://EzineArticles.com/?expert=Ron_San

Car Accident Settlement - Get the Most Out of Process

Getting a fair car accident settlement can be difficult. Insurance companies are savvy, and their adjusters are trained to negotiate and settle with you for the lowest amount possible.

Insurance companies leverage the vehicle damages (and the total loss process) against you. For example, they will try to settle with you as soon as they talk to you. They will tell you that they will fix the car and "take care" of you if you settle for any/and all claims. They will offer you anywhere from $50 to $500. They will try to "cut of" the rental car as soon as they can so you are put in a weaker position and you settle faster. These techniques are unfair, but yet they are legal.

The problem with accepting an early settlement is that you can potentially lose all your negotiation leverage. A car accident settlement due to a bodily injury is substantially more powerful than a total loss settlement. A bodily injury claim will take into account subjective values (i.e. pain and suffering, loss of consortium, loss of business income, etc.) The total loss settlement will only include "objective values." The insurance company will find the value of other similar vehicles in your local market and determine what is the most the can offer you.

If you settle your injury claim, then you have no leverage. The insurance company will fix the car however they want to (i.e. they will fix your car with used parts). Having the power to argue that you were injured could make the adjuster be much more likely to settle with you for what you are owed. If you do not have an injury claim, trying to get your vehicle fixed or totaled can be a very difficult task.

Insurance adjusters know that you can leverage an injury to get a better treatment in the vehicle claim. They usually "split" adjusters so you deal with two different people. The liability adjuster (the person dealing with vehicle damages) will tell you that the injury does not have anything with your vehicle repairs and that you have to talk with Joe Smith for that, to please call 1-800... When you talk to Joe Smith, Joe Smith will tell you that the vehicle damages do not relate to the injury. They will play "musical chairs" with you so they do not have to give you a straight answer.

In theory, they are correct. The injury and the vehicle damages are two different things. However, you are indeed dealing with one car accident. Your inconvenience for having your vehicle hit, having to deal with adjusters, dealing with medical bills, doctors, etc. must be compensated somehow. Injury adjusters will try to tell you that they are only settling pain and suffering, and that a car accident settlement does not include "inconvenience". This is incorrect. You are the ultimate person that settles your claim. You are owed for all damages that the liable party caused.

http://EzineArticles.com/?expert=Hector_Quiroga

The Name Is The Game For Car Insurance

Just stumbled across this article, find it quite amusingly interesting. Hope you enjoy reading it.
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It seems that there's more to a name than you might expect.

Car insurance provider insure has compiled a list of the names that are most likely to make a car insurance claim during the course of the year.

Apparently, men called Gabriel aren't so angelic as they top the list at 40 per cent while guys named Kyle, Jay, Muhammad and Aaron should also take extra care on the roads as they too make the 'top five' list of male names most likely to make a claim.

For females, Natasha is often a crasher - 32 per cent of women drivers with that name make a car insurance claim. The likes of Harriet, Juliet, Natalie and Helen are also unlucky behind the wheel.

By contrast, if you're a male driver named Finlay or Archie you'll be relieved to hear that your driving record is comparatively good. Both names top the list of male drivers least likely to make a car insurance claim at just 13 per cent. For women, it's Jasmine and Eleanor who have the safest record on the road with just 13 and 14 per cent of female drivers with those names making claims.

Despite the significant variations, car insurers insist they do not take names into account when determining car insurance premiums.

A spokesman for the car insurance provider insure stated that while statistics do not lie, the reasons why certain names are involved in more accidents than others is more likely to be down to their personalities, age or the car they drive rather than something written in the stars.

So whatever your name may be, you'll still have to shop around to find a cheap car insurance deal. By building up a no-claims discount you could lower your car insurance premiums and give yourself a good name.

Article Source: http://EzineArticles.com/?expert=Alex_Gregory

Have you been in a car accident recently?

Are you dealing with a stubborn insurance adjuster? Is your car a total loss after your car accident? How can you recover what your vehicle is worth? How can you prove the fair market value of your vehicle? Can I retain my vehicle even though it's a total loss? Did you know you're entitled to loss of use?

Find out more how you can handle the situation at :
http://tinyurl.com/2u6mvx