Mr Jimmy Lauw Thian Chye asked why NTUC Income paid out a third-party claim in an accident he deemed to be extremely minor ("Must insurer pay out claim if vehicle is not damaged?"; Wednesday).

We agree with Mr Lauw that the initial demand of almost $8,000 from the other driver involved in the accident was excessive.

That was why we negotiated for a much lower amount, including legal fees and miscellaneous charges.

We spoke to Mr Lauw and received his consent before we settled the claim in June last year.

With the claim settlement, Mr Lauw's no-claim discount (NCD) was reduced by 30 per cent.

The details of the NCD are stated clearly in the motor insurance contract, and is a standard practice among all motor insurers.

Regarding Mr Lauw's assertion that his insurance premium would be loaded, he was, in fact, offered a renewal of his motor insurance at the standard premium rate.

It is also untrue that Mr Lauw was "blacklisted as a bad risk" as it is not the practice of NTUC Income to blacklist any motorist due to bad claims experience.

Claiming against another party in a road accident is a civil claim that typically involves costly and time-consuming legal proceedings.

We advise motorists to make road safety their top priority when they are driving.

In the unfortunate event of an accident, it is advisable to settle minor accidents amicably.

For more serious accidents, they should contact their insurers immediately, or as soon as it is safe to do so.

NTUC Income policyholders can engage the help of our Orange Force riders to render assistance at the accident scene.

Under no circumstances should motorists allow their vehicles to be taken away by unknown parties.

Finally, NTUC Income has zero tolerance for fraudulent or inflated claims.

Any suspicious claim will be thoroughly investigated and referred to the authorities once we have sufficient evidence.

Over the years, a number of these cases have been prosecuted in court.

Peh Chee Keong
Vice-President
Motor Insurance
NTUC Income