Court case has big implications for foreign drivers in Singapore

Recently, a court case was decided in Singapore that has been ten years in the making. When a Malaysian driver had an accident in Singapore years ago, it set in motion a chain of events that now has implications for any drivers in Singapore who are insured with a non-Singaporean insurance provider. What were the details of the case, and what might its implications be for you? Read on to find out more.

The organizations

Singapore has had a recent court decision that addresses key issues related to foreign drivers, their passengers, and car insurance in the country. While the government is certainly involved, the court case in question largely revolves around car insurance companies in both Singapore and Malaysia, and an independent insurance body known as the Motor Insurers’ Bureau of Singapore (MIB).

The MIB is important, and critical to the case in question, as its primary function is to provide funds for injuries incurred by people involved in automobile accidents through no fault of their own. If the person responsible for these injuries is uninsured, or even unknown, this organization will provide funding to address medical costs. As it is a body created by the insurance industry itself, the funding for these payouts comes directly from Singapore’s car insurance providers, and as it exists through an agreement with the Singapore government, the government monitors that each insurer provides their fair share of funding.

Beyond the MIB, the other organization involved was Malaysian insurer AM Gen.

The court case

The court case that has recently been decided upon stems from a vehicle accident that occurred over a decade ago, on December 8th, 2007. A motorcycle driver from Malaysia was traveling in Singapore with his wife as a passenger. The driver got into an accident that left the passenger with serious medical injuries that required hospitalization. Afterwards, the passenger wanted financial restitution from either the driver or her insurer for the medical costs incurred, and this is where the trouble began.

Malaysia has different rules than Singapore when it comes to car insurance. In this case, the important difference is that, while motor insurers in Singapore are required to include coverage for insured drivers’ passengers, Malaysian motor insurers are not. Thus, when a claim was made against the Malaysian motor insurance policy for the said passenger’s injuries, the Malaysian insurer denied it even though the law of the land where the accident occured would dictate that the passenger be covered, which brings us back to the MIB.

In such cases where a person was injured in a motor accident, but is not being reimbursed by an insurer, people can typically turn to the MIB to provide financial assistance. However, due to the specific details of the situation – especially that it involved a Malaysian driver and insurance policy – the MIB fought back against any obligation they might have to provide funds for the passenger’s medical treatment.

In the end, the insurer did not want to pay, the MIB didn’t want to pay, and the passenger was left in limbo without any compensation for her injuries. However, the MIB was eventually willing to join the passenger in a lawsuit that sought to compel AM Gen to pay for the passenger’s medical bills, which came to a total of SGD 788,047.73, plus annual interest of 5.33%.

The decision

On the plaintiff’s side of the argument in the court case, AM Gen is actually a signatory of an agreement between the MIB and Malaysian insurers that extends the Singaporean agreement governing the function of the MIB to particular Malaysian insurers that agreed to sign on. This led them to make the case that AM Gen was liable to cover passengers injured in Singapore.

On the other hand, AM Gen argued that the MIB had no grounds to request reimbursement on, as they had also not paid out any money with regards to the case, and the case should be dismissed as neither the MIB or the passenger had the right to bring an action in court. Furthermore, they argued that there was no requirement for AM Gen to pay until the MIB did first.

(Please keep in mind that these are very general overviews of the case. For more specifics from the Judge himself, please check this link.)

Taking all of the various factors into account, Justice Quentin Loh found in favor of the plaintiffs, who in this case ended up being the MIB solely. This rewarded the MIB with the full SGD 788,047.73 plus interest, as he deemed that AM Gen was reliable due to their agreement to be party to the previously mentioned agreement with the MIB.

This award could then be used to reimburse the MIB and allow them to pay the passenger for her medical bills.

The implications

While it may seem to many that justice was done in this court case, it should be kept in mind that this case hinged on an agreement between the MIB and AM Gen that is not in place with all Malaysian insurers. This means that in the same situation with a different Malaysian insurer, the outcome may not have been a positive one for the injured party.

This also means that anyone driving in Singapore would be well advised to possess a third party liability motor insurance policy from a Singaporean insurance provider if they want to ensure that their passengers will be extended the same insurance coverage that third parties receive if an accident caused by the insured occurs. Without it, passengers may have to resort to seeking reimbursement from out of a driver’s pocket. This can result in legal proceedings and damaged relationships that are completely avoidable.

If you are a driver not just from Malaysia, but anywhere in the world, and need to secure a third party liability or comprehensive car insurance policy, feel free to reach out to Kwiksure Singapore for your needs. Our advisers are available to answer any and all questions you have, as well as provide you with a free price quotation and comparison of plans from Singapore’s top motor insurance companies. Contact us today!