Traffic Accident – How to claim on your Insurance

If you drive a car and you meet with an accident, you face a dilemma. Which party is at fault? Do you want to settle the liability on the spot, or leave it to your insurance company to handle?

In the case of a minor accident, it is best that both parties agree to have a private settlement and not to make any claim on the insurance policy. One party may agree to pay a sum of money to the other party to repair any damage.

The private settlement should be recorded in writing and be signed by an independent witness. Some insurance companies have issued a simple form that can be used to record a private settlement. If you do not have this form, a simple agreement can be written. In fact, if both parties are honorable, a verbal agreement will be adequate.

Some years ago, another car hit my car in the car park. The driver was a young lady, who was obviously an inexperienced driver. Her father called me on the mobile phone and agreed to bear the repair cost of my car.

In case they do not keep their word, I reported the accident to my insurance company but indicated that I had made a private settlement. The other party paid the repair bill, which amounted to more than $1,000. The accident never became an insurance claim.

If you make a private settlement, both parties will keep their No Claim Discount.

If private settlement cannot be reached, you have to make an insurance claim. Both parties can, on the spot, record down the circumstances of the accident and the extent of the damages to the vehicle. Photographs can be taken. If most or all of the facts are agreed, the insurance companies for both vehicles can settle the claim quite easily.

The insurance companies have issued a form called the Singapore Accident Statement, which can be used for this purpose.

Only a small percentage of motorists used the Singapore Accident Statement. This is due to the lack of awareness and to the disputes over the facts of the accident.

Insurance companies are partly to blame. Many years ago, I saw an advisory from an insurance company to its policyholders never to admit liability for an accident. This could be a reason for the many disputes involved in motor accidents.

A better advisory is for the policyholder to use the best judgment and agree to the facts of the accident.

If you cannot reach a private settlement or get a Singapore Accident Statement agreed on the spot, with photographs of damages, what is the next best approach for you to take?

You have to make a report the accident to your insurance company as soon as possible. You have to bring the vehicle to the reporting center, so that photographs of the damages can be taken. These will be useful to settle the repair cost, and also to establish the party that bears the liability for the accident.

Some insurance companies used the service of Idac centers (i.e. independent damage assessment centers). These Idac centers have long operating hours, up to a late time at night, and are located in various parts of Singapore. Most motorists find the reporting at an Idac center to be quite convenient.

After reporting, some insurance companies ask you to send your vehicle to their authorized workshops to carry out the repair. Some allow you to find your own workshop.

Some undertake to arrange the repair for you and ensure that the repair is carried out to a satisfactory repair standard.

It is best for the policyholder to let the insurance company arrange the repair. They can find a suitable workshop to repair the damages at a fair price. They can ensure that the repair is carried out to the quality standard. The policyholder is freed from the hassle of arranging the repair. In some cases, they are given a courtesy car to use during the period of the repair.

By reporting at an Idac center, you will have a good record of the damages. This may be useful to defend against an inflated or aggravated claim that may be submitted by the other party against you.

In past years, many insurance companies did not have a system of prior assessment of damages. They allowed their policyholders to send their vehicle to any workshop. The workshop submits a report of the damages and estimate of the repair cost.

This has led to inflated claims. Some workshops aggravated the damages to the vehicle to submit a large repair bill.

The workshop entices the customer by giving some incentive, such as replacing the old tires, or to repaint the vehicle. The repair bill can easily be more than three times of the fair repair cost.

Some workshops use touts to look for the accident cases and bring the vehicle to their workshop.

Inflated claims will result in higher premiums to be paid by all motorists, including those that did not make any claim.

If you wish to make a third party claim against the other vehicle, which you deem to be at fault in the accident, you should submit your claim directly to the insurance company of the other vehicle.

You should not let your workshop handle your third party claim, as they may inflate the repair cost. They will be using your name to lodge the fraudulent claim. This may cause legal problem to you, as you may be held to be a party to the fraud. It is best to avoid this potential problem. Indeed, it is quite common for third party claims to be inflated or fraudulent.

Tan Kin Lian

The writer is the former chief executive of NTUC Income. He was chairman of the task force that recommended measures for improving the practices of motor insurance, including the setting up of the Idac centers in 2002.