Low-risk motorist, Income fall out over policy claim
Firm refuses to renew policy saying she made 3rd-party claim through lawyer, raising bill; she denies it and rejects fresh conditional renewal
By Christopher Tan
RETIRED school principal Margaret Low, 57, is what some motor insurers might call a low-risk client.
The grandmother and part-time consultant enjoys the maximum 50 per cent no-claim bonus, has stayed with her insurer since 1994 and is a law-abiding motorist. She has a letter from the Traffic Police to prove it.
But last month, her long-time insurer, NTUC Income, refused to renew her policy - claiming that she had been unreasonable in making a claim.
It turns out that Madam Low was involved in an accident in October last year, when another car rammed into her Skoda Octavia from behind. A claim was filed against the other driver.
Madam Low said: 'I went to an Independent Damage Assessment Centre (Idac), and I let my regular mechanic, whom I'm comfortable with, handle the case.'
The repairs, which included changing the bumper of her two-year-old car, took about three days and she had the use of a courtesy car.
She thought all was well again after she collected her car - until Income refused to renew her policy, which is due to expire on Oct 22.
Income, which insures more than 40 per cent of cars here, sent her a letter dated Aug 31 to tell her this.
It said: 'To avoid difficulty in future claims, we regret that we will not be inviting further insurance cover for your coming renewal.'
Madam Low protested: 'But I didn't claim against my own insurance.'
This, apparently, does not matter to Income, which is the insurer for the other driver too.
Over recent years, it has put in hard measures to stem what it claims to be runaway repair costs. These include requiring clients to take vehicles involved in an accident to Idac before going to a workshop, and requiring them to patronise its own panel of workshops.
Income chief executive Tan Kin Lian said 'most of our policyholders understood the rationale and cooperated with us when making a claim'. These clients get their policies renewed. But each year, 120 or so do not.
Mr Tan categorises them into three groups:
People who act 'unreasonably' when settling a claim. An example of this would be insisting on repairing at workshops which Income says inflate claims;
People suspected of colluding with workshops to inflate claims or to stage accidents;
People who harass Income's service staff.
The insurer does not need to do business with them, according to Mr Tan.
'Each month, we invite 20,000 policyholders to renew their motor policies - 75 per cent of them renew,' he said. 'Each month, we are able to get more new cases to replace those that don't renew with us. This accounts for our increase in market share.'
In the case of Madam Low, the chief executive said 'we requested her to have her car repaired by our workshop, but she insisted on submitting a third-party claim through a lawyer'.
'As a result, the total claim amount increased by about $1,000.'
Madam Low flatly denies this.
'No one from Income called to ask me to go to another workshop,' she said.
'And I certainly didn't hire a lawyer to make the claim. My workshop handled the claim.'
Income has since offered to renew her policy 'if she agrees to our claim policy for future claims'.
But she said she is taking her business elsewhere.
'I don't mind paying a bit more to know I'm well covered and, in the case of third-party claims, there won't be any hassle,' she said.
'It's the principle of the whole thing. Why should my record be tarnished by a renewal rejection when I did nothing wrong? I didn't cause the accident, but they're penalising me.'