All motor vehicles used on public roads are required to be insured against liability for death or bodily injury caused to others arising out of the use of the vehicle (Clarify terms in insurance policies on carpooling, by Mr Lok Kok Wah; May 2).
Passengers in a private-hire car that is involved in a motor accident can claim compensation from the car owner or its insurer.
Private-car policyholders should be aware that their insurance policies have a "Limitation to Use" condition, which restricts usage to social, domestic and pleasure purposes.
If the vehicle is used for hire and reward - including under the Road Traffic (Car Pools) Exemption Order - the "Limitation to Use" condition is breached by the policyholder.
Therefore, the insurer will not be liable for property damage or injury, unless the policyholder had declared to his insurer at the inception of the policy that he intends to use the vehicle for hire and reward.
Motorists should also be aware that while an insurer may deny indemnity on a property damage claim, the Motor Vehicle (Third Party Risks & Compensation) Act disallows an insurer from denying compensation to claimants for third-party bodily injury.
However, the same Act has a provision which gives the insurer the right to seek full recovery from the policyholder of the losses paid out.
As most cases of injury claims tend to be of substantial amounts, a policyholder will suffer heavy financial loss if he is not covered by an expanded motor insurance policy.
Ultimately, it is important to remember that all motor insurance policies are not the same.
General Insurance Association of Singapore