Inflated injury claims

Dear Mr Tan
I assume you must have read the article in the Sunday Times on inflated car insurance claims. When you were at NTUC you implemented a rule whereby all car insurance policies at NTUC requires the insured to agree to use only workshops designated by NTUC. I believe that also covered all claims by 3rd parties. It was a good measure but not popular with many insurance companies who decided not to follow your footsteps. I wondered why.

It seemed that insurance companies when they met with 3rd party claims, they are very eager to settle the claim even when they are inflated. The excuse they give is that they do not wish to undergo a long legal process so it is easier to settle even if the claim is many times higher than what is really required to repair the car. Is this the case?

I have had experience of this nature before but the insurance company is very evasive when I question them. They are also very unwilling to disclose the amount the claim they have settled. Why is this so?

The end result is that I end up giving up my no claim bonus. Is there something we can do to nip this problem. I have a healthy suspicion that the insurance companies actually encourage this practise. Your views would be appreciated

REPLY
Here are my views. This is a difficult problem. It is difficult to solve.

The party that can solve it is the Government.They have to pass a law to make sure that people who cheat by inflating claims are severely dealt with. If the Government does not want to pass a law, then the insurance companies will continue to face difficulty in dealing with this matter. And the consumers will have to pay higher premiums.