K. C. Vijayan | The Straits Times | Monday, Aug 25, 2014
SINGAPORE - She assumed she did not have to tell her car insurer that she had been offered a $200 composition fine for hitting a pedestrian, and had paid up.
But this ended up costing Ms Joanne Ho more than $54,000 after a court ruled she had to pay back her insurer, India International Insurance, for the compensation to the pedestrian and legal costs.
The district court ruling has made it clear that errant motorists who fail to promptly alert their insurers of composition fines offered in traffic accident cases may end up paying for the damages due to the victim.
The road accident involving Ms Ho, 44, occurred in November 2007 in Telok Blangah. The consultant notified the insurer of the accident a day after it happened. But it took her 18 months to notify the insurer that she had accepted the $200 composition fine offered by the Traffic Police.
She admitted she did not inform the insurer about the composition offer right away as she was under the impression it was not needed, because she had already alerted the firm about the accident.
But India International Insurance took Ms Ho to court, saying that her lapse repudiated its liability under the insurance contract and she should reimburse the firm for the $34,555 it paid the victim.
Ms Ho's lawyer Cosmas Gomez argued that it would have made a small difference to the insurer if she had informed the firm early of the composition offer. But District Judge Seah Chi-Ling disagreed.
He pointed out that the late disclosure denied the insurer "the opportunity to consider if early settlement" could have helped save on costs.
The judge also wrote in his decision grounds that Ms Ho was bound by the terms of the insurance contract, which entitled the insurer to repudiate liability and pass the buck to its client for her breach.
"Having paid (the victim) as required under the Motor Vehicles (Third Party Risks and Compensation) Act, the (insurers) were entitled to recover such sums" from Ms Ho under the relevant clause in the insurance policy, he added.
Ms Ho's appeal last October was rejected by the High Court. And last month, a court registrar's order set her bill payable to the insurer at about $54,000, which included legal costs and interest over four years since the suit started in 2010.
Lawyers noted this was the first time such a case - on whether an insurer can repudiate liability for the motorist's failure to inform it in timely fashion about being fined by police - has appeared before the courts.
Senior lawyer Niru Pillai, who is head of litigation at Global Law Alliance, said: "Non-notification is a breach that prejudices the rights of the insurer, who is obliged to pay the victim upfront."
Ms Ho hopes others can learn from her experience.
"I asked around and a lot of people did not seem to know that insurers can repudiate liability on this ground," she told The Straits Times yesterday.
"This is very unfortunate and has been stressful for me for many years. It's sad but I have to move on."
- See more at: http://transport.asiaone.com/news/g...lerting-insurer-promptly#sthash.F6BtqILf.dpuf
SINGAPORE - She assumed she did not have to tell her car insurer that she had been offered a $200 composition fine for hitting a pedestrian, and had paid up.
But this ended up costing Ms Joanne Ho more than $54,000 after a court ruled she had to pay back her insurer, India International Insurance, for the compensation to the pedestrian and legal costs.
The district court ruling has made it clear that errant motorists who fail to promptly alert their insurers of composition fines offered in traffic accident cases may end up paying for the damages due to the victim.
The road accident involving Ms Ho, 44, occurred in November 2007 in Telok Blangah. The consultant notified the insurer of the accident a day after it happened. But it took her 18 months to notify the insurer that she had accepted the $200 composition fine offered by the Traffic Police.
She admitted she did not inform the insurer about the composition offer right away as she was under the impression it was not needed, because she had already alerted the firm about the accident.
But India International Insurance took Ms Ho to court, saying that her lapse repudiated its liability under the insurance contract and she should reimburse the firm for the $34,555 it paid the victim.
Ms Ho's lawyer Cosmas Gomez argued that it would have made a small difference to the insurer if she had informed the firm early of the composition offer. But District Judge Seah Chi-Ling disagreed.
He pointed out that the late disclosure denied the insurer "the opportunity to consider if early settlement" could have helped save on costs.
The judge also wrote in his decision grounds that Ms Ho was bound by the terms of the insurance contract, which entitled the insurer to repudiate liability and pass the buck to its client for her breach.
"Having paid (the victim) as required under the Motor Vehicles (Third Party Risks and Compensation) Act, the (insurers) were entitled to recover such sums" from Ms Ho under the relevant clause in the insurance policy, he added.
Ms Ho's appeal last October was rejected by the High Court. And last month, a court registrar's order set her bill payable to the insurer at about $54,000, which included legal costs and interest over four years since the suit started in 2010.
Lawyers noted this was the first time such a case - on whether an insurer can repudiate liability for the motorist's failure to inform it in timely fashion about being fined by police - has appeared before the courts.
Senior lawyer Niru Pillai, who is head of litigation at Global Law Alliance, said: "Non-notification is a breach that prejudices the rights of the insurer, who is obliged to pay the victim upfront."
Ms Ho hopes others can learn from her experience.
"I asked around and a lot of people did not seem to know that insurers can repudiate liability on this ground," she told The Straits Times yesterday.
"This is very unfortunate and has been stressful for me for many years. It's sad but I have to move on."
- See more at: http://transport.asiaone.com/news/g...lerting-insurer-promptly#sthash.F6BtqILf.dpuf
