My Motor Insurance Cancelled Without My Knowledge

Letters to the EDITOR @ New Straits Times

I read the following letter with interest, therefore I have to put in some comments….

The following are some main pointers we can zoom into:

  1. The policy was cancelled with forged authorisation and the party who did it has no reason doing so…. that’s what was being perceived….
  2. No notification was ever served on Pragasam before the cancellation but is this because the “last known address” was never made known in Pragasam’s application?
  3. It took the company more than 5 months to notify Pragasam – was it a case of insurer’s inefficiency or Pragasam was not too traceable?

Isn’t the main issue more to do with the importance of the Customer’s Last Known Address?

Here the contents of that letter….
NEW STRAITS TIMES – Letters 
Motor insurance: Company needs to have better verifying procedure

2011/07/15
S. PRAGASAM, Kajang, Selangor
letters@nst.com.my|
I HAD submitted payment for the renewal of my road tax and insurance through my car agent in mid-January and received my road tax sticker and cover note within a week.

Just last week, my agent called me to collect a cheque from his office. I assumed it to be a refund for a probable overpayment. To my surprise, it was a refund for a cancelled car insurance.

I had never met or instructed my insurer to cancel my car insurance. My communication was solely with my agent.
Someone had submitted an application in February cancelling my insurance by forging my signature, supported by a statutory declaration stating that the reason for the cancellation was that I had already sold my car.

The insurer had not called me to verify the authenticity of my supposed application to cancel my insurance coverage. I cannot understand how any insurance company could ignore such a simple verification procedure.

I had been driving without car insurance for the last five months and, thank God, there was no serious accident involving a third person, or myself, or damage to my car.
Is this possibly the first step before a car gets stolen? I appeal to vehicle owners to verify the validity of their car insurance coverage.

I can think of some possible situations here:

Personnel Covering Up For An Acceptance made Beyond Authority:

It is obvious that this cancellation was done by some internal parties (agent inclusive) within that insurance company – real reason could be the staff concerned had accepted the insurance case and then discovered that it falls within the EXCLUSIONS of the company’s guideline. He or she could have been reprimanded by the superior and forced to get it cancelled, by hook or by crook….

My guess is that they put in all necessary documentation into order including a letter of cancellation advice, supposedly to be sent to Pragasam but never did…. all documents were done on a “pretentious” basis….

The processing department of the insurance company processed the requirement to order, chucked into the pigeon hole for the next step, which is to get it deliver to the agent and thence the customer. Perhaps they all waited for the cheque so as to make explaining to the customer less painful!

All these steps took months, perhaps also the agent took sometime to locate Pragasam.

 

Pragasam’s Last Known Address Was NOT Made Known Or Updated To The Insurance Company

This “last known address” of the customers is always a bane to the insurance companies as most agents treat this as NOT IMPORTANT for if the insurance company needs to contact the customer, they can do so via them…. no necessity to channel information directly to the customer. However in reality agents usually request their principal to direct any mails or information to the customers, especially where such customers fall under the SMALLER category.

“Agents don’t give priority to ensuring Insured’s correspondence address is correct when filling up an insurance application for them, which is the mother of most problems that the customers eventually faced!”

What Pragasam should had done at the point of purchase is to ensure his correspondence address is correct and any mails should be able to reach him without any problem. He should also ensure his email address is inserted into the proposal form or any digital database…..

“All cancellation notification must be sent on REGISTERED mail….”

If this was done, Pragasam should not face any problem even if his vehicle met with a claim after his insurance is terminated by the insurer. Reason being, the insurer must had sent a REGISTERED letter notifying that cancellation to his last known address in the proposal form. And, it is also the duty of the insurer to ensue that the said letter is sent – the onus of proof lies with the insurer in any subsequent turn of event. The insurer also must ensue that Pragasam is given a reasonable time frame to respond to the cancellation notification.

 

Point to note when purchasing an insurance policy….

‘ALWAYS ENSURE YOUR ADDRESSES ARE CORRECTLY INSERTED INTO THE APPLICATION FORM”

Ensure not only your correspondence address but also your email address.

 

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8 comments for “My Motor Insurance Cancelled Without My Knowledge

  1. Any70
    August 16, 2011 at 06:45

    Is there no repercussion for the person who forged the signature? Is that legal? to forge a signature in order to cancel a policy for any reason? my fear is if within the insurance industry our signatures can be forged and accepted randomly as this, where is the security of our protection through insurance?

    • August 21, 2011 at 22:41

      Your query is a good one but the industry regulators are not at their top in attempts to bring the culprits to the courts…. More than often if there arise nothing adverse to the policyholder the personnel would just close case for it makes their job much easier. In an event of suspect fraud claim, more than often it is difficult to prove and usually those fraudsters would had bought off the Insured. But I agree the industry must do more to make forging Insured’s signature a criminal breach of trust…

  2. Andrew Wong
    July 18, 2011 at 13:33

    Yes, fully agree any notification on cancellation by insurer must be sent by REGISTERED mail. This is provided in the Insurance Act if I remembers well. It is also a policy condition for Insurer to observed. I would opine that in these times where technology of emails are commonly available, insurer should also be made obligated to send important notifications to Insureds via email provided such email address is given in the Proposal Form. However, in the absence of such information (e-address) in the proposal form, then there is no obligation on the part of insurer to send such notification via email.

    As for the reason to why an unauthorised cancel notification (forged signatory of the Insured) was sent in to the insurance company, another possibility could well be `mistake by agent’. A scenario would be the agent actually received instruction from another client to cancel his motor policy. But had erroneously submitted Pragasam’s vehicle instead. Forging signature actually what I understand is quite common by agents. However, they forged with good intents `so as not to inconveience the Insured’ would be their contention.

    I would suggest as a supporting measure, when submitting the Notification of Cancellation it should be accompanied by the company’s resolution note (if applicable) and a 1 page Sales & Purchase Agreement (SPA) duly executed by Insured and the purchaser. The SPA is not an inconvenient document for the Insured as it is also a useful evidence for him indicating he has sold and released the car on a certain date and time to safeguard himself from any legal dispute thereafter.

    • July 19, 2011 at 02:01

      Don’t think is mistake of the agent, more to that I supposed…. Case of agent accepting cover that he or she is not supposed to. The SPA would be very troublesome.

  3. July 18, 2011 at 08:24

    Lots of times proposal form waive since i was not requested to sign anything nowadays, so how to ensure the address is filled by the agent?

    • July 19, 2011 at 01:55

      Just insist the address on the e-policy or ecover note given at point of purchase is correct. If email address is inserted even better.

      • Anonymous
        July 19, 2011 at 08:36

        i would like to think with the personal data protection act in force next year, insurers would have to ensure that the insureds’ correspondence addresses are updated. simply because they need to obtain consent and also obligated to advise the insureds to update their personal data on a schedular basis.

        • July 20, 2011 at 08:20

          This would mean insurers are obligated to update customers info thus more reason to ensure the contact address is the latest.

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