An accident vehicle must first be inspected by a surveyor to ascertain damages before recommending a fair and reasonable repair cost to the car owner. Furthermore, the burden is on the owner to prove that his repair cost is fair and reasonable. The insurance company would usually appoint their surveyor to check whether the repair cost has been inflated. It was also reported that the General Insurance Association (GIA) has chosen not to reveal or disclose full data on their motor claims business.

With the vehicle population last year increasing by 8 per cent to more than 850,000 and the number of reported accidents increasing by 17.2 per cent, it is ironical for insurance companies to suffer a disproportionate increase in deficit of 65 per cent to $103.2 million. If the average premium collected is $1,100 per vehicle, the total amount received for motor insurance would be $935 million. That means the total payout for the motor insurance sector would amount to $1.038 billion.

The number of reported accidents last year was 151,583, an increase of 11.5 per cent over 2006. Out of the reported cases, it is estimated that 50 per cent of the insured would be at fault, 25 per cent would send their vehicle to the car agent due to new car or warranty issues and 10 per cent of the report cases were likely to approach their own insurance to get their vehicle repaired by their insurance's authorised workshops. This left only about 15 per cent of the reported cases or 22,737 cars to be repaired by owners' preferred workshops. On an average repair cost of $3,000 per car, the total amount claim by preferred workshops of owners (after less 20 per cent on liability and negotiation) would be about $54.6 million. Therefore owners' preferred workshop repair cost was only about 5 per cent of total payout from the motor insurance sector.

Why is GIA taking so much issue on the 5 per cent that their members spend on owners' preferred workshop repair cost on third party claims instead of concentrating on the 95 per cent expenses or $983.6 million that any prudent business would address?

Does 5 per cent of total payout by insurers justify their action to make owners report the accident within 24 hours immediately after the accident, when insurance law requires the insured to report accidents to their insurers as soon as practical? Does 5 per cent of the total payout justify the insurers to be involved in repair business which can clearly be seen as a 'conflict of interest'?

I would agree with SMWA that GIA should not protect their members' interest to the detriment of motor workshops and car owners.

Alan Chuang