Third-party insurance still a flop
Complicated process is to blame, says study
The third-party insurance law still fails to protect accident victims, most of whom pay for medical bills out of their own pockets, according to a study by the Health Insurance System Research Office.
Pongpisut Jongudomsuk, the director of the National Health System Research Institute, said the Protection for Motor Vehicle Accident Victims Act has still not been able to serve the public as intended. The law says all vehicle owners must have compulsory insurance.
The regulator recently approved a 100-baht reduction in premiums for compulsory motor insurance, effective in March this year. The new premium for passenger cars will be 600 baht, down from 700 baht. The rate for coaches will decline to 1,100 baht from 1,200 baht, and for trucks to 900 baht from 1,000 baht.
In the event of an accident, the damaged party receives coverage of up to 50,000 baht for injury and hospital treatment. For the loss of organs, disability or death, the payout is 100,000 baht.
Besides compulsory insurance, firms offer voluntary first-, second- and third-class coverage. Citing car accident statistics from 1999 to 2005 published by the Public Health Ministry, Dr Pongpisut said that fewer than one-fifth of victims sought assistance under the law, while as many as 63% preferred paying medical bills out of their own pockets or used the universal health care scheme, social security fund and state officials' welfare fund instead. This was due to complicated claim procedures, document requirements and delays in receiving compensation.
The study also found that relatively few low-income victims sought assistance provided under the law, while the ratio of their medical expenses and death toll was very high.
''The result is that private car insurance companies have been enjoying the benefits over the last eight years,'' he said, citing a report that premiums earned from compulsory motor coverage by insurance firms rose substantially over the period to 10.727 billion baht in 2006 from 6.555 billion in 1999.
Paibul Suriyawongpaisal of Ramathibodi Hospital said private insurers were unwilling to pay compensation and tended to demand documents unnecessarily. ''The problem is not because of inadequate premiums, but rather because of a lack of management efficiency,'' said Dr Paibul. ''As [motor insurance] is legally compulsory, it should be handled from the outset by the state authorities, not the insurance firms.''
But Suchin Wanglee, president of the General Insurance Association, said the accusations were groundless. He called it an excuse for health authorities to move a large sum of money from third-party insurance funds into the cash-strapped universal health scheme.
A consumer protection group and the National Health Commission have pushed for amendments to the Protection for Motor Vehicle Accident Victims Act, claiming it has failed to serve its purpose. The number of car accident victims each year is also on the rise.
For instance, according to the latest update by the Disaster Prevention and Mitigation Department, the New Year death toll from road accidents in the seven-day high-risk period (from Dec 28 to Jan 3) reached 369. Another 4,514 people were injured.