Must insurer pay out claim if vehicle is not damaged?

I agree with Mr Kenneth Kong Kitson ("Greater transparency needed in motor insurance claims"; Oct 27).

I was in a similar situation when my car just "touched" the rear bumper of another car.

As there was no damage to either vehicle, I apologised to the other driver and assumed that everything was over and we would each go on our way.

To my surprise, I received a letter from my insurer NTUC Income that a claim had been made against me by the other party for $7,895.95.

I felt that the other party was trying to inflate the costs. So I disputed the amount and submitted photos to prove that there was no damage to the two vehicles.

Income sent me a second letter stating that it had negotiated a settlement with the claimant, and that my no-claim discount would be reduced.

My motor insurance premium would also be loaded as I had been blacklisted as a bad risk.

Must insurance companies pay out in damages even when there is no sign of damage to the other vehicle?

Is an insurance claim warranted when a vehicle merely "touches" another vehicle?

Such payouts are pushing premiums up.

Consumers need to know that insurance companies can be trusted and that they are working for their customers' interests.

Jimmy Lauw Thian Chye

A version of this article appeared in the print edition of The Straits Times on November 04, 2015, with the headline 'Must insurer pay out claim if vehicle is not damaged?'. Print Edition | Subscribe