Offer fair terms for renewal of motor insurance

30 September 2012 

Editor

Forum Page

Straits Times

Many consumers have consulted me on problems similar to those

experienced by Mr. Tan Yaw Cher (ST 29 Sep, "Don't let insurers

leave car owners with renewal fix")

Like Mr. Tan, they had encountered a bad accident after driving 

carefully for many years, and had their renewal premiums jacked up

a few times, or worse, being rejected for renewal. 

Most other insurance companies will also decline to provide the

insurance, and for the few that do, the terms are usually very stiff.

Consumers in this dire straits have no choice but to accept the 

stiff terms, as motor insurance is compulsory. They do not have 

the luxury of time to shop around. It is like being held to a ransom.

I urge the regulator, namely the Monetary Authority of Singapore, 

to get insurance companies to introduce fair terms for renewal of

motor insurance. Here are my suggested guidelines:

1. If the existing policy has a No Claim Discount of 30% or higher, the

renewal must be offered with no loading

2. If the No Claim Discount is less than 30%, the renewal must be offered

at a loading of not more than 30%. 

3. The loading can be increased to 60%, if there are more than one

accident in a year

4. If the insurer wishes to impose a loading, the consumer must be 

given at least three months notice to look for another insurer.

Tan Kin Lian

President
Financial Services Consumer Association

Letter published in Straits Times:
http://www.straitstimes.com/premium/forum-letters/story/4-ways-fairer-renewals-20121004