'No-fault' insurance for PMD users a step too far

Requiring personal mobility device users to purchase insurance against third-party injury and property damage would be a step forward.
Requiring personal mobility device users to purchase insurance against third-party injury and property damage would be a step forward.PHOTO: ST FILE

In a recent letter, Mr Andrew Seow Chwee Guan suggested that a "no-fault" insurance system would provide a possible solution to the problems associated with pedestrians injured by errant personal mobility device (PMD) users (Make 'no-fault' insurance a must for PMD-sharing firms, Feb 18).

Requiring PMD users to purchase insurance against third-party injury and property damage would be a step forward.

However, making it "no-fault" may be taking it a step too far.

At present, there are several insurers in Singapore that provide relatively inexpensive third-party liability insurance for PMD users, and there is no lack of choice for them.

A "no-fault" system will inevitably increase premiums, as insurers would be bound to pay all claims regardless of the circumstances. This would penalise both errant and safe PMD users.

In addition, it may also force insurers out of the market if they can no longer underwrite profitably or at premiums accepted by the market, punishing all PMD users, especially those who ride safely.

"No-fault" systems may also encourage some to "manufacture" a minor claim by stepping in front of a PMD user and then claiming for injuries under a scheme that does not require proof of liability.

A further problem is how the injured party would claim for injuries.

Mr Seow suggested that an injured person could claim from the insurer, regardless of fault, and then pursue a separate civil action against the PMD user.

It would be interesting to see how this would operate in practice.

For example, assuming the "no-fault" claim is successful, would any payments made to the injured party be taken into account when considering the civil liability claim?

If not, then the insured could receive "double indemnity", which is not the aim of the justice system.

Also, should the "no-fault" claim be subject to a limit? This is important as civil action is theoretically not subject to a limit.

If a "no-fault" system is to be adopted, perhaps it could be designed akin to the Work Injury Compensation Act's system, which allows an injured party to elect whether to pursue a claim under the Act or as a civil claim.

Despite the importance that insurance plays in compensating injured pedestrians, the emphasis should still be on educating PMD users, and the effective enforcement of fines and penalties against those who transgress the rules.

Spriggs Graham Michael (Dr)

A version of this article appeared in the print edition of The Straits Times on March 01, 2019, with the headline ''No-fault' insurance for PMD users a step too far'. Print Edition | Subscribe