WHO PAYS, WHO PROFITS, WHO LOSES

 

 Consumer campaign on Third Party Insurance

The Compulsory Third Party Insurance (CTPI) campaign is Council’s bid to highlight problems and seek a fair and just deal for CTPI consumers and accident victims. Council is pushing for changes to laws and regulations governing CTPI so that its objectives, such as protection and compensation for third party accident victims are reinforced.

The current third party policy creates a false sense of security through payment of a compulsory (annual) insurance cover which is then weaved in with various exclusion clauses in favor of the insurance companies who provide the cover. What is even more disturbing is that there is no ceiling set for the amount of compensation a victim can seek if he or she meets with an accident except for, bus accidents which is $40,000 per bus.

Since there is no ceiling under the current law, victims knock on the door of the courts as an option to get fair compensation provided the victim can afford legal fees. Despite going to Courts, the ambiguity in the law has not allowed for successful judgments as hoped for, in favour of the third party victims as seen with the trends in case law development in this area. 

The Council has found that many accident victims and even CPTI clients are not receiving fair redress and compensation due to exclusion clauses, legal costs, and limitations by the law or ignorance. Even in cases compensation was received, the amount was often too small to cater for the injuries suffered and long delays were costly for victims.

Exclusion clauses in CTPI contracts often included situations where victims of an accident caused by a driver who was involved in an irregular behavior would not be covered. Such irregular behavior included intoxication of the driver, unlicensed driver, unauthorized driving of a vehicle and driving a vehicle for a purpose that was not intended for. The large number of exclusions has prompted the Council to question the very reason for CTPI, i.e. to provide for compensation against third party risks from vehicular accidents.

The Council is also concerned that despite millions of “compulsory” premiums going to insurance companies a very small fraction is paid out in claims. Bus passenger compensation is often limited to $4000, while the limit for a whole bus is at $40,000.

Compensation for private vehicles also varied from $4000 to $6000 and if some were not satisfied with the amount they were awarded they could go to the courts to satisfy them.

Apart from the measly sum paid to third party victims, many have had to go through costly and lengthy litigation in a bid to receive compensation.

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