The General Insurance Association says the value of motor insurance claims fell by 8.5% to $494.4 million last year (2016), despite the number of accident reports rising by 8% to a five-year high of 161,361.
The association suspects the spike in private-hire car population to be the reason for this anomaly. This is because like taxis, private-hire car insurance policies come with a high excess – an initial amount the insured has to pay before the insurer steps in.
This excess, which can be as high as $5000 for such cars, discourages Uber and Grab drivers from filing claims. It is also for this reason that motor insurance premiums are unlikely to rise, industry sources say.
But here’s the thing. Wouldn’t these drivers have collided with other road users who are likely to file claims? And because filing against these drivers is usually an onerous process (according to lawyers familiar with the process), motorists may file against their own insurance policies.
If that is the case, wouldn’t insurance cost go up all round, and insurers will eventually have to raise premiums?
Unless, of course, these private-hire drivers have been colliding with one another, or crashing into street furniture. There may be some of such cases, but the chances of them being involved in an accident with an ordinary motorist are probably higher.