BETWEEN 2007 and last year, 4,424,076 road accidents were reported in Malaysia, with 67,667 deaths and many more seriously injured. The numbers are rising with 521,466 road accidents and 7,152 fatalities reported last year alone.
Road safety measures obviously are not efficient. Adding to the misery is that most accident victims do not get compensation.
The Consumers Association of Penang (CAP) must be lauded for persistently calling for the introduction of a no-fault-liability (NFL) scheme to replace the compulsory insurance for third-party injuries and legal liability to passengers of taxis and buses.
Former Bar Council chairman Kuthubul Zaman Bukhari has, again, objected to CAP’s proposal, stating that “the injured and the next of kin of those who died in road accidents obtain a higher compensation from court awards now”.
While the statement may be true, those receiving compensation were far fewer than those who did not. It is time to examine the real scenario.
Under the existing motor insurance scheme, accident victims must sue the drivers at fault and wait for several years to receive the compensation awarded by the court. During this period, the injured or families of those killed continue to suffer.
But, many people are driving or riding without valid licences, or under the influence of drugs or alcohol.
They would be left to settle the claims themselves as insurance companies would repudiate coverage whenever the terms and conditions of motor insurance policies are breached.
As many drivers or riders have little money or few assets, victims who win paper judgment but are not compensated would be devastated.
On the other hand, the NFL scheme is similar to the personal accident insurance, which pays out claims without the need to establish fault.
While the amount covered may be adequate for only half of the victims, compensations are swiftly paid out, allowing those affected to carry on with their lives instead of waiting for a closure.
Some could buy their own life and general insurances, as no scheme can be fair to all, but the NFL is much more superior to the liability insurance.
According to CAP, the advantages of the scheme are:
PUBLIC will benefit from reduced administrative costs;
FULL protection for all, including hit-and-run victims;
PROMPT compensation for accident victims;
PROMPT medical treatment since the NFL guarantees hospital treatment payments;
COMPENSATION is guaranteed by law;
COURT cases are reduced, thus improving court efficiency and saving public money;
NO legal fees; and,
POLICE can concentrate on solving crimes since they are no longer burdened by accident cases.
General insurance companies have long complained that the motor portfolio had not been profitable to them and clamoured for higher premiums, which are fixed under the Motor Insurance Tariff introduced in 1978.
If that is the case, they might as well discontinue with motor insurance if cash-flow from motor premiums is not needed to sustain their operations, and allow just one insurer or pool to collect premiums from vehicle owners and pay out claims.
The government, through the Social Security Organisation (Socso), could take over as it is more efficient for one organisation to administer than 20 general insurance companies.
In such a scenario, motor insurance premiums would go down instead of up, as costs would be reduced by cutting off commissions for insurance agencies and legal fees in civil
More importantly, the safety net is extended to those not covered by Socso or any form of insurance. If not, we are far from being a caring society if road accident victims or families of those killed are left to fend for themselves.