Tuesday, September 18, 2012

Ferrari crash: Regulator should step in

Sep 18, 2012

I AGREE with Mr Abbas Vakharia ("Fatal Ferrari crash: Insurer's stance cause for consumer concern"; last Saturday).

AXA's insurance policy clearly states that it covers a motor vehicle that is accidentally damaged by the operation of several named perils, including "collision".

But it does have a clause stating that the policy does not cover "any wilful act and/or wilful negligence" of the insured or an authorised driver.

A "wilful act" means that the Ferrari driver intended to collide with the taxi and even take his own life. While the driver was reckless, I cannot imag(in)e that he had intended to cause the collision.

I hope that the Insurance Commissioner's office will discuss this issue with AXA and clarify if its stand is justified, based on the circumstances.

Consumers need to be assured that insurance companies will act fairly in meeting their obligations.

Special attention is required from the regulator, as motor insurance is compulsory by law.

Tan Kin Lian
Financial Services Consumer Association

[I respect Mr Tan's expertise and experience in the insurance industry and value his contribution and input on this matter. However, while he is right to say that a "wilful act" would imply that the driver of the Ferrari intended to crash and die is an unreasonable assumption, he has unfortunately ignored the second part which is "wilful negligence", and exaggerated the first.  

In this case, there was probably "wilful negligence" on the part of the driver who should have known that going at more than twice (and maybe even 3 times) the speed limit was dangerous. The fact that the car sped through a red light about 4 seconds after the lights had turned red was eitther a wilful act (he intentionally ran the red light), or wilful negligence (he didn't see the red light). And at the speed he was going, either was dangerously fatal.  

The larger question is why would the insurance company do this?   Of course to save money for the company.   And if the driver were a poor man with no money and the victims needed the compensation, this would be a travesty.

But the driver was not poor and his estate can pay, and making his estate pay is better justice and better disincentive.   What this means is that in future if any other owner of supercars were to drive as recklessly with wilful disregard for safety or rules or the lives of others, their insurance company with not cover their recklessness. They or the family they leave behind will pay for their recklessness. And this should sound a warning to other supercar owners.   Mr Tan is right to be concerned, but he should also see the larger picture.]

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