You're involved in a car accident. The other driver claims it's your fault. You know it isn't but your insurer still reduces your No Claim Discount (NCD). It's like rubbing salt in the wound.

CEO of DirectAsia.com explains how his company is helping such drivers hold onto their NCDs.

When it comes to car insurance, one major frustration for many drivers is having your NCD penalised when you're involved in an accident that isn't your fault.

This can happen when the other party involved fails to report the circumstances of the accident correctly. Insurers are then presented with conflicting statements regarding what happened. When this occurs and there are no reliable witnesses, the case is usually settled on a 50/50 liability basis by most other insurers. So, both parties involved in the accident are forced to share the burden of the costs.

This also means that the NCDs of both parties are penalised. Naturally, the driver who told the truth feels badly done by. It also has very little benefit for the driver who is misrepresenting the facts as they too will lose their NCD. Not only that, this situation can give unscrupulous lawyers and/or workshops an opportunity to inflate the claim. All in all it's a no win situation.

Reconstruction Expert

At DirectAsia.com we had a recent case in which our insured driver and a third party both blamed one another for changing lanes and causing the accident. Generally where there are conflicting statements like this most insurance companies will reduce both parties NCDs.

But at DirectAsia.com we call in a special reconstruction expert to determine what's happened. In this case, our finding revealed our insured driver had given a correct statement and that the third party driver had in fact changed lanes and caused collision.

Since we knew our insured driver was not at fault we advised him to still claim under his own policy and we guaranteed to protect his NCD. This meant his NCD would not be penalised. We also pursued a claim to recover the excess and loss of use on his behalf against the third party insurer. Even if we are unable to recover these expenses from the third party, our insured driver's costs are limited to his excess and his loss of use costs. His NCD is protected upon renewal of his policy.

Risky Business

We called the third party driver to demonstrate to her that her statement was inaccurate. If she wished to go forward she was not only risking possible legal action, she could also lose the opportunity to make a claim against her insurer. If a driver fails in a third party claim they may no longer be able to fall back on their own policy and could well end up having to pay for their own repairs plus legal and administration costs.

Sound Advice

So, we advise drivers to claim directly against their insurer and let the insurers settle the case between them. Ad DirectAsia.com if we receive conflicting statements, we'll go the extra mile to find out exactly what happened by calling in our reconstruction expert. If we determine that you are not at fault, we'll still protect your NCD.

But many other insurance companies don't investigate further and will penalise both parties if there is any doubt about who is at fault. If the claim is reported truthfully, however, and one party is found to be at fault, then the other party will not be penalised.

At the end of the day, insurers are here to settle claims. If you are at fault, which can happen and that's why you are buying insurance, your insurance will pay your claim. So, there is little point in misrepresenting the circumstances of the accident.

One day, you may also be in a situation where you are not at fault and you'll appreciate the other party being truthful about the circumstances.

Get A Witness

Having an accident is emotional and stressful which can lead to confusion about what has happened. This is why it is extremely helpful to have independent witnesses setup-up and agree to be contacted for clarification.

We appreciate the difficulties of calling on witnesses in Singapore. Everybody fears they'll have to go to court to testify. But rest assured most cases hardly go to court when there is a reliable witness.

A witness will help protect the interest of the party who is not at fault. Who knows, maybe one day that innocent party could well be you. So, do be a witness when you have the chance.