MY CAR was involved in an accident in last month and I hold a comprehensive motor insurance policy with MSIG Insurance, with a 30 per cent no-claim bonus. Within 24 hours I reported the accident with the signed report in accordance with the Motor Claims Framework.

The insurer-authorised workshop first advised me to make a claim under my own policy. However, knowing that this would surely result in a future increase in premiums and confident that the other driver was at fault, I decided to pursue a third-party claim against the other driver's insurer. In doing so, I had to foot my own repair bills and, should I fail in my third-party claim, there would be no recourse to claim against my own policy subsequently. I thought that by bearing the risks on my own and acting in the best interests of my insurer, I would not be penalised. But I was wrong.

On Oct 30, I received a call from MSIG to inform me that 'due to the accident' and while my third-party claim is in progress, my renewal premium would increase from $1,174 to $2,063 - by a whopping 76 per cent.

MSIG has not suffered a single cent of loss from the accident and is unlikely to do so, given that the other party did not make a claim against me. Is this what a responsible motorist deserves when he reports an accident in timely fashion, opts to pay his own repair bills and bears the risk of making a third-party claim - all in favour of his own insurer?

I simply cannot understand the logic behind this. To put it simply, it will always be a 'win-win' situation for insurance companies and 'lose-lose' for the policyholders.

Robin Ng

This article was first published in The Straits Times on Oct 31, 2008.

For more The Straits Times stories, click here.