New Motor Claim Framework is a cartel in disguise?

[Apollo]

MOTOR INSURANCE CLAIMS New framework impractical and unjustified and Govt should check it

I REFER to the new motor claims framework (MCF) imposed by the General Insurance Association (GIA) on Sunday.

 

The total motor premiums collected last year amounted to more than $750 million.

 

Yet, insurers suffered losses of $103 million, resulting in a payout of more than $853 million for their motor business.

The association justifies the new framework by blaming non-accredited or independent workshops. But the facts show otherwise.

 

There were more than 150,000 reported accident cases last year.

 

Half the number would be at fault and would have to pay the insurance excess amount for their own damage claims.

And those without comprehensive coverage have to pay for their own repairs.

 

Another 30 per cent would arrange for the car agent or the insurers to do the repairs. That leaves only 20 per cent of motor accident repairs which are handled by an owner's preferred workshop.

 

In fact, repair costs by the latter are likely to amount to less than 10 per cent of the total payout by insurance firms for motor claims.

 

Yet, the association chooses to blame the issue of inflated claims on this minority group to justify a new framework which allows insurers to call the shots exclusively.

 

The facts do not square with the GIA's rationale for introducing the MCF and forcing motorists to repair their vehicles at GIA-approved workshops.

 

It is shocking that the GIA is allowed to implement a new MCF.

 

The Monetary Authority of Singapore and anti-competition agencies should address the negative fallout from the new MCF viz:

 

[*]Restricting the car owner's right to choose his own repairer; [*]Inconveniencing a policy holder into lodging a report within 24 hours even if there is no damage to his vehicle;

[*]Diverting the repair business to a selected few; Restricting the trade of owner-repairers who comprise 95 per cent of motor workshops;

[*]Transgressing the anti-competition act; [*]Penalising motorists if they do not follow the unfair terms by removing their no-claim bonus and denying policy renewals; [*]And forming a cartel to increase premiums.

 

I urge the GIA to be transparent in detailing the actual losses, to study the actual cause of their losses and work with the Singapore Motor Workshop Association to find a pragmatic, fair and reasonable solution for motorists and their preferred workshops.

Alan Chuang

Managing Director/Accident Analyst,

Partners Automotive Consultants

 

http://www.straitstimes.com/ST%2BForum/Sto...ory_244160.html

[Apollo]

Insurers win, everyone else loses

WE SHARE the same sentiments as Mr Patrick Tan in his letter last Wednesday, 'Insurer's move penalises motorists again'. The new insurance framework is designed to benefit the General Insurance Association (GIA) and insurance companies at the expense of all other parties involved, including workshops and motorists.

 

Less than 10 per cent of repair workshops are appointed as 'authorised' workshops. The new framework forces motorists to report to these authorised workshops or risk losing their no-claim discounts.

 

In other words, the rest of the non-authorised workshops lose their right to serve the industry and their regular customers.

 

While the 'authorised' workshops enjoy the benefit of higher business flow through the new scheme, insurers are quick to add new conditions to limit labour rates pay out, spare parts costs, courtesy cars, without due consideration to actual market rates.

 

Workshops which disagree with such terms lose their 'authorised workshop' status too. With such restrictions, repair quality and safety factors may be compromised.

 

If the appointment of authorised workshops is based on a standard set of industry accreditation standards where any workshops that qualify can be appointed, workshops can still be encouraged to participate in the new framework.

Unfortunately, this is not the case.

 

Insurers exercise their choice of appointment arbitrarily. A quality workshop may not necessary be successful in its application as an authorised workshop for insurance companies. It is a 'take it or leave it' situation for repairers. Why are repair workshops deprived of the chance to earn an honest livelihood, to compete fairly in an open market, and to serve their regular customers?

 

Is it right for insurance firms to take away a motorist's freedom of choice, by threatening to deny indemnity if they fail to comply with their new regulations?

 

The new insurance framework is reportedly supported by the Monetary Authority of Singapore and welcomed by the Consumers Association of Singapore.

 

On behalf of our fellow members and the motoring public, we seek clarifications as to whether the respective authorities are aware and agreeable to these practices with due consideration to the impact on the motoring trade.

 

Bernard Low

President,

The Singapore Motor Workshop Association

 

http://www.straitstimes.com/ST%2BForum/Sto...ory_244161.html

[Ronnchee]

Cant win them, join them.

 

Our gahment also cartel what, nothing surprise.

[Watwheels]

I agree with this one. The system lacks transparency, car owners lack choices on workshops, insurers & authorized workshops call the shots. All they care are their profit$.

 

Their so call loses are just claims and got no figures to show. I wonder whether they use this as an excuse to come out with such underhanded system to monopolise the situation?

[Friendstar]

consumers aka motorists DO NOT have the freedom to choose

[Picanto]

isn't this country supposed to be a democratic one? we remember the singapore pledge clearly.

[Furrynadz]

after failed attempt with IDAC

aunty lucy strikes again

[Patwong]

Wow,

I didnt read too much into the 'reporting within 24hrs' issue. Thought insurer do good by preventing inflated claims and thus lower premiun for vehicle owners.

 

But as the above article stated, we as consumer, really lose big if accident repair wasnt done properly if the authorised workshop cut corner.

[T_orange]

Being restricted to the authorised workshops is a double edged sword. In a way, it prevents the claims from being exaggerated. Of course, anti-competition. If this leads to the insurers from further losses through exaggerated claims and the savings passed to consumers, then its a good thing. Then again, its a good thing, only if the money saved is translated to lower premiums. Then the authorised workshops must be competent too.

 

From the insurer point of view, its prob the best way to plug the issue of unscrupulous workshops inflating claims and repair cost. Ultimately, the inflated claims would hit insurers... then the people who suffer are the people (and including those who kena the accident) who buy insurance from the insurers.

 

But, it seems... either way the premiums just go up.

Edited June 5, 2008 by T_orange

[Chongster]

on the point of authorized workshops, i also feel that the AD's workshop for that make of car should also be deemed automatically authorized. who knows how to repair a car better than its own makers? also, cars within warranty period stand to lose their warranty if repaired elsewhere.

 

i believe this is not the case now.

[Wanderer]

The pledge???

 

It has been revised to an entirely new version based on how things work now....

[Wind30]

can someone explain to me how that guy arrives at a "less than 10%" number for claims from unauthorised workshop.

 

I don't understand his logic....

[Mbris250]

well....we've been brought up & educated to nip all problems in the bud. this insurance thing is just skimping on the surface. costs that go up will be unlikely to come down. we'll take it as another fact of life.

[T_orange]

Actually, it wouldn't been such a big issue, if people are more careful in their driving. Honestly, if everyone is a bit more patient and careful, there would ve been less accidents. Not to say that all accidents are due to impatience or reckless drivers, but being more careful n patient helps to minimise accidents.

 

There should be more talk and campaign on getting everyone to be courteous and careful when driving too, instead of just throwing in new changes on the claims process and etc and etc...

[Mbris250]

My point exactly. It's the continous education that will solve the issue not merely increasing premiums & restricting the quality of repairs. I've heard several times amongst workshops that NTUC insurance limits replacement of parts at the expense of car owners. Now the boundaries for such ethics have increased.

[Miles]

Accidents are but accidents. Nobody wish to have accidents. They happen, "accidentally".

The single party that benefits the most if there is zero accident is the insurance company. Because their profit would have been 100%.

Motorist pay for ins premium because it is compulsory.

Workshops will lose big time.

 

But, if there is zero accident (or rather zero claims) for one year.... very lucky year,... do you think insurance company will reduce the premium to close to zero the next year? I doubt so.

 

So, in this situation, insurance company wants to gain everything and lose nothing.

 

 

That said, i know many many many workshops out there are just like vultures. waiting to profit any accident, and more. They are unscruplous. They have lost big chunks of biz due to very few old cars on the road. and they are targetting accident damage repair as their only means of survival. That's why the rant when MCF is implemented.

 

Well, there are no angels in the industry. Everyone's after our (the consumer's) money.

Edited June 5, 2008 by Miles

[Apollo]

true.. but in a market with few players or even an exclusive player, it is the consumer tat will suffer. price regulation with fewer player is easier then open market.

[Nolicense]

aiyah.. want to blame is becos many cases is taxi wanting to eat people.

i cite 2 case.

 

1. i hit taxi, rear bumper litte scratch, pay him $200 settle

2. hit car in front which touch taxi in front. taxi not even 1 scratch. taxi claim also happy like f@ck. bill from taxi alone $6k.

 

got meaning or not?