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Insurance loophole? Cabby refuses to pay up for car accident

Insurance loophole? Cabby refuses to pay up for car accident


THEIR car was hit by a taxi from the back.

But when they later tried to claim the $2,000 repair bill from the cabby’s insurer, they were told that the cabby had signed a letter discharging them and the cab company from all claims relating to the accident.

This means that Mr Tan Teck Yiang and his wife will have to settle the matter with the cabby privately.

But so far, he has refused to pay up.

Said Mr Tan, 40, a regional business manager: “This accident has been a nightmare. Can companies be absolved of all responsibilities with a discharge letter from the driver?” The accident happened on Oct 15 last year.

Mr Tan’s wife, Madam Seow Kwok Long, 39, a healthcare worker, was driving the couple’s six-year-old Ford Laser Tierra when it was hit by a TransCab taxi at a junction along Ang Mo Kio Ave 3. She was alone at that time and had stopped at a red light.

She said: “It had just stopped raining and the road was a bit wet. The driver said that he couldn’t stop in time.”

Madam Seow noticed small dents on her car’s bumper, while the taxi’s right headlight was broken.

“I told him if the damage is not serious, I would not make a report. But if the damage is serious and repairs are needed, I would have to make a report,” said Madam Seow.

On her father’s advice, she reported the accident to the Independent Damage Assessment Centre at Sin Ming. She said that she did not inform the taxi driver as she thought that the insurance company would do so.

The total repair cost plus vehicle rentals came up to $1,968. The rear bumper and the reverse sensor had to be replaced.

In December, Mr Tan was informed by the workshop that the cabby had signed a letter discharging TransCab and its insurer at the time, Liberty Insurance, from all claims relating to the accident.

He then met up with the taxi driver, Mr Johnny Yow, 52, at the workshop on 29 Dec last year.

Mr Tan claimed that Mr Yow disagreed with the repair costs and refused to pay.

When contacted, the cabby disputed the extent of the damage caused to Mr Tan’s car.

Said Mr Yow: “It was just a slight knock. There was no damage at all (to the other car). When it happened, she and I agreed that since the car had no damage (and no one was injured), the matter will be dropped.”

A spokesman for TransCab said that as Mr Yow did not report the accident to them within 24 hours, he has to pay the full excess up to a maximum of $2,800.

She added that Mr Yow had signed the discharge letter because he wanted to settle the matter on his own, although the company does not encourage its drivers to do so.

Said the spokesman: “Once the driver signs the discharge letter, then it’s hard for the company to handle the case. We cannot withdraw the discharge letter.”

Mr Yow said he signed the discharge letter because he wanted to negotiate a private settlement with Mr Tan.

“I’m not willing to pay, but the accident did happen. It’s my mistake,” said the cabby.

“If they want to settle, I’m willing to pay $300, but will they accept it or not?”

Mr Tan said the amount was unacceptable. He has written to the Land Transport Authority (LTA) and the General Insurance Association of Singapore (GIA), expressing his concern over the use of the discharge letter which he felt was a loophole.

“Do we want a situation where taxi drivers can just go back and sign discharge letters after all accidents?” asked Mr Tan.

When contacted, an LTA spokesman said: “As the insurance contract is an agreement between the insurance companies and the owner of the vehicle, drivers are thus advised to seek GIA’s assistance with regard to the claim.”

However, Mr Derek Teo, president of GIA, said that it was “not GIA’s authority or place to intervene in claims matters between an insurance company and its policyholders or third party claimants”.

He added: “GIA has always encouraged our members to resolve claims disputes with their customers to reach a settlement quickly and amicably.”

When contacted, Mr Roland Heng, assistant manager of claims at Liberty Insurance, said: “Our position is very clear. The driver failed to report the accident. He then signed a discharge letter so Liberty Insurance is unable to proceed with the claims.”

The deadlock has left Mr Tan upset and frustrated.

Although Mr Tan is aware that he can take legal action to recover the money, he is reluctant to do so.

He said: “Even if the court rules in our favour, we could end up spending a lot of money on legal fees, without getting anything in return, if the taxi driver is incapable of paying up.”

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