AIG insurance - be very wary of the terms!

[1fast1]

I bought a Toyota Wish from Borneo Motors a couple of months ago. The salesman offered me the standard AIG Auto Protector policy (supposedly "comprehensive"), which I took as using some other insurance would incur a penalty. This seems to be fairly standard practice among many dealers, including ADs.

 

I saw this letter published in the newspaper a few days ago (I think it was on 2nd June):

 

 

In case it isn't clear, the writer (Tan Siak Khian) is claiming that there are clauses in this standard policy that exclude coverage for unnamed passengers falling outside the age range 16-65 (meaning the young and the elderly) and also passengers who are intoxicated (meaning that if you are the designated driver ferrying a drunk passenger around, that passenger will not be covered in the even of an accident).

 

I checked my own policy yesterday, when I was relatively free. I've attached a photo of the offending section.

 

 

It appears the letter writer was spot-on in his observation (look at parts d. and e.).

 

I'm now worried about the implications of this contract on coverage for my 12-year old child and my elderly parents. Does this mean I can't safely carry them in my car anymore? I've never heard of "named passengers", but does AIG expect me to nominate them personally to ensure coverage?

 

My sales guy at Borneo was of little help - I asked him to clarify this a few days ago, but he has yet to respond.

 

BTW, my father's Nissan Note from Tan Chong was also insured under this AIG scheme, and that also has weirdness - he tells me the policy only applies if he (the driver) is under 65, but he did declare his age correctly at the time of application (and they approved it!).

 

I don't think any of our other policies (with other insurers) have these issues. I'm making this post to advise others to read through their policy terms very carefully, and if possible, share what they find.

 

I'm also asking for advice about my options. I believe I can cancel my AIG policy and get the remaining premium, but there's always a penalty for early cancellation. Do you think that I should be able to make a case for waiver of this penalty given the (in my view) unjust clauses embedded in this contract?

 

Also, I wonder if this legal language falls afoul of the Motor Vehicles (Third-Party Risks and Compensation) Act

(CHAPTER 189)? Quoting,

 

 

 

Exclusion of liability in respect of passengers to be of no effect

5.—(1)  Where a person uses a motor vehicle in circumstances such that under section 3 there is required to be in force in relation to his use of it such a policy of insurance or security as is mentioned in section 3(1), then, if any other person is carried in or upon the motor vehicle while the user is so using it, any antecedent agreement or understanding between them (whether intended to be legally binding or not) shall be of no effect so far as it purports or might be held —

(a)

to negative or restrict any such liability of the user in respect of persons carried in or upon the motor vehicle as is required by section 4 to be covered by a policy of insurance; or

(b)

to impose any conditions with respect to the enforcement of any such liability of the user.

[37/80; 23/98]

(2)  The fact that a person so carried as referred to in subsection (1) has willingly accepted as his the risk of negligence on the part of the user shall not be treated as negativing any such liability of the user.

[37/80]

(3)  For the purposes of this section, references to a person being carried in or upon a motor vehicle include references to a person entering or getting on to, or alighting from, the motor vehicle, and the reference to an antecedent agreement is to one made at any time before the liability arose.

Interestingly, the Act talks about the liability of the user, but does not directly address the liability of the insurer? Or is that implied since the Act is about insurance anyway? Edited June 5, 2016 by Turboflat4

[inlinesix]

Under your motor policy, there is a personal accident rider which covers passenger of your car.

 

Accordingly, when u Kenna bang, ur passenger can sue culprit which is covered by the act u quote.

 

However, if u r the culprit, ur passenger is entitled to PA rider under your motor policy. This part is not covered by the act u quote

[Soya]

Let's wait for AIG's reply on ST Forum page.

 

Bet their CEO is oso stunned by this obscure escape clause that could destroy their reputation the way Aviva sabo theirs a few years ago by enacting an unfair clause.

 

If AIG comes out and stand by it and tells us to suck it up, I'll be one of those who will cancel my policy w them.

[Darthrevan]

this is a shocking revelation..thanks for pointing that out

 

previously bought a Toyota & also under AIG..didn't know this at all

[Lala81]

Wah. Please do keep this thread updated

[1fast1]

Under your motor policy, there is a personal accident rider which covers passenger of your car.

 

Accordingly, when u Kenna bang, ur passenger can sue culprit which is covered by the act u quote.

 

However, if u r the culprit, ur passenger is entitled to PA rider under your motor policy. This part is not covered by the act u quote

If I understand you correctly, the disclaiming of liability in my policy is legal.

 

The Act only covers the right of passengers to seek recompense against the culprit user (aka driver). But since it doesn't specify that the liability rests with the insurer, that depends on the policy. Since AIG explicitly disclaimed the liability in those specific cases I mentioned, that means the driver (me!) will have to bear all liability in those cases?

[1fast1]

Wah. Please do keep this thread updated

Please spread the word, I think more should be made aware of this.

[Ahbengdriver]

This is like mis-selling.

[Kusje]

The payout for death is 10k?!

[Kb27]

Nothing new about insurance companies.

They buy your risks.

 

They collect premiums for their profits.

They lose money when you claim.

So they have to write up 1,001 clauses to protect themselves.

[Piyopico]

Look guys this is not an exclusion per se. Rather it is a limitation of the PA benefits that is bundled into this plan.

 

You cannot read a contract this way. The policy wordings clearly is referring to the PA section of $10,000.

 

The person you sent this to ST dun even know how to read a policy.

 

Dun jump on the bandwagon.

[inlinesix]

If I understand you correctly, the disclaiming of liability in my policy is legal.

 

The Act only covers the right of passengers to seek recompense against the culprit user (aka driver). But since it doesn't specify that the liability rests with the insurer, that depends on the policy. Since AIG explicitly disclaimed the liability in those specific cases I mentioned, that means the driver (me!) will have to bear all liability in those cases?

 

If passenger of your car claims against you under 3rd party liability, your motor insurance will cover it.

 

If passenger of your car claims against PA benefit (rider policy of comprehensive motor insurance) within this policy, they are subject to this clause.

 

In essence, AIG motor policy = Comprehensive motor insurance + passenger PA cover.

[1fast1]

If passenger of your car claims against you under 3rd party liability, your motor insurance will cover it.

 

If passenger of your car claims against PA benefit (rider policy of comprehensive motor insurance) within this policy, they are subject to this clause.

 

In essence, AIG motor policy = Comprehensive motor insurance + passenger PA cover.

You clarified something that I've been unsure of for a while. I wasn't sure if third party cover included passengers in one's own car. Seems this is the common understanding, so I'm glad I learned that.

 

Please spell out exactly what PA means here - "Personal Accident"?

 

If 3rd party liability fully covers a passenger's claim, why would they need to cover against PA benefit (which seems lower)?

[inlinesix]

You clarified something that I've been unsure of for a while. I wasn't sure if third party cover included passengers in one's own car. Seems this is the common understanding, so I'm glad I learned that.

 

Please spell out exactly what PA means here - "Personal Accident"?

 

If 3rd party liability fully covers a passenger's claim, why would they need to cover against PA benefit (which seems lower)?

 

PA = Personal Accident.

 

Comprehensive motor insurance = third party liability + Own damage.

 

Under 3rd party liability claims, your passenger is claiming against party at fault (which may not be necessary you).

[Budgetdriver]

I believe this only applies to the Personal Accident Rider which u get some disability and death benefits, which is supposed to be on top of medical expenses.

 

For medical expenses, there should be another section in the policy which indemnifies the driver from medical expenses by driver and passengers arising from an accident. 

[1fast1]

Look guys this is not an exclusion per se. Rather it is a limitation of the PA benefits that is bundled into this plan.

 

You cannot read a contract this way. The policy wordings clearly is referring to the PA section of $10,000.

 

The person you sent this to ST dun even know how to read a policy.

 

Dun jump on the bandwagon.

I'm not jumping on any bandwagon here. I'm merely clarifying the details of a contract that I'm bound by. Frankly, the fact that there are others here who are also seemingly perplexed by this language indicates that the questions I'm raising are perfectly legitimate.

 

I've asked Davidtch what "PA" means here - but you're welcome to answer as well. I don't see the use of that acronym "PA" anywhere in my contract. The section I cited (and provided an image of) was entitled "Motor Policy Endorsements", not "PA" or "Personal Accident" (if that's what PA is supposed to stand for).

 

The section I cited states at the outset that its clauses are applicable in the Policy Schedule - I assume that means these legal terms have force in the main policy and are not merely some "rider" on top of the main cover? Or am I wrong? Is my interpretation so unreasonable given the way the document is laid out?

 

In fact, the document is infuriatingly obscure in defining the insurer's liability. In Section II (Liability to Third Parties) - which never spells out "passengers" but I would now assume includes passengers since third party generally covers that - says that it will pay the amount I am legally liable to pay in compensation to others for death or bodily injury to any person.

 

Yet in Section III (Medical Expenses), under "What is covered", the document then states that the insurer will pay the reasonable medical expenses incurred by me, any authorised drivers or any passengers in my vehicle up to a maximum of $1000 per person.

 

Note the apparent contradiction there. The first clause seems to be unlimited in terms of third party payouts, but the second one limits medical expense payouts to $1000 (tell me, what sort of medical care can a thousand bucks buy one in Singapore nowadays?)

 

And then, finally, there's the whole Motor Policy Endorsements section which I've already highlighted.

 

To my decidedly non-lawyerish brain, these conditions seem to be mutually conflicting. I would be grateful for any clarification. If you can show me exactly, and unequivocally, how I'm totally wrong about all this, then I'll be glad to accept.

 

BTW, if you need me to photograph every page of the contract (excluding personal details), I'll be glad to do so.

Edited June 5, 2016 by Turboflat4

[1fast1]

BTW, there is a section (section IV) entitled "Personal Accident Benefits" in my policy. It seems to apply only to me (the driver) and does not mention anything about passengers.

Edited June 5, 2016 by Turboflat4

[ins1dious]

BTW, there is a section (section IV) entitled "Personal Accident Benefits" in my policy. It seems to apply only to me (the driver) and does not mention anything about passengers.

 

Can you post this section. This is a similar title as my AXA policy which we discussed earlier.