Image via Flickr user Jane Paulson

The offer of fast cash by a stranger in Changi General Hospital enticed Liyana Mohamed Noor to lie to the police and insurers twice that she had been injured in road accidents. She claimed to be riding pillion on her boyfriend’s motorbike when it collided with a taxi. The accident was bogus. So was the boyfriend, court documents obtained by The Sunday Times shown. Then, she claimed to be a passenger on an SBS Transit bus that had an accident with a motorcycle. She was not on the bus. Liyana, 22, was eventually found out and sentenced to five months’ jail on April 7 this year. While she was caught, insurers are concerned that many others get away with making false or inflated injury claims.

Left unchecked, these could lead to higher costs for insurers and higher insurance premiums for motorists.

Their average annual motor premium has risen 30 per cent since 2004 to more than $1,000.

Cases like Liyana’s are not an exception. A week ago, 16 people were charged with making false injury insurance claims of $4,000 to $10,400 each time.

One woman allegedly had $29,553 in all disbursed to her by her insurer for four accidents – in which she was allegedly not present at the scene and did not suffer the injuries she reported.

If convicted of cheating, they could be jailed for up to 10 years and fined.

A tip-off from an insurance company last year led to their arrest, the biggest in recent memory. Insurers allegedly deceived include NTUC Income, India International Insurance, American Home Assurance Company and AIG Insurance.

The General Insurance Association told The Sunday Times that the rise in bodily injury claims in recent years is a worrying trend. They increased from 8,704 in 2007 to 16,174 in 2008 and 17,868 last year. It is working with various parties to share information on fraudulent cases and build strong evidence so that fraudsters can be brought to justice.
The parties include the Monetary Authority of Singapore which regulates the insurance industry, Traffic Police, Subordinate Courts and Singapore Medical Association. Doctors write the medical reports necessary for people to make injury claims.

While GIA declined to discuss the modus operandi of claimants, industry players suspect a change in accident reporting procedures in 1999 may have contributed to the problem.

Motorists are no longer required to make a police report if no one is injured or if they received outpatient medical leave of fewer than three days. There are exceptions, such as accidents involving a pedestrian or a cyclist.

The Traffic Police will not investigate these cases, thus speeding up the processing of claims.

But a motor insurance taskforce formed by the Consumers Association of Singapore and Automobile Association of Singapore pointed out in March this year the possibility of people putting up dishonest accident reports to their insurers now that they did not have to lodge a report with the police.

It was also a change for motorists who used to avoid lodging a police report for fear of being fined or earning demerit points on their driving licence. They would settle matters privately without the involvement of lawyers and insurers. Now, they had fewer qualms about making a claim, and possibly inflating them.

See full story at HealthXchange