Financial Times

Reporting accidents now compulsory


Are we a nation where breaking the law is as easy as a knife slicing through butter? We don’t want to belabour the point but five years ago the Sunday Times FT reported that motorists in not reporting accidents because it’s easier to collect their insurance under on-the-spot payment schemes, were breaking a crucial law.

The scheme however became very popular as it meant eliminating the need to spend endless hours at a police station. Meet with an accident, call the insurance agent who does a quick assessment of the damage and prompt payment is made. Don’t report the accident … that’s what most motorists did. Those who still reported an accident saying they were law-abiding citizens, which the police in fact should have encouraged at that time, faced many problems to get a certified copy of the complaint as the other (involved) party often collected the insurance without going to the police!

Our main story today says that the government wants to implement this law with additional fines and a new provision making it compulsory for insurance companies also to report accidents. With the new provisions, the crash-and-pay scheme is likely to go off the books as a product since a police entry must be made before insurance money is claimed although some companies say they would still pay the claim on the presumption that the motorist files a police entry later.

The law was always clear on reporting accidents but enticing insurance ads led to non reporting of accidents. This is what the Sunday Times FT in an article headlined “Advertising tempts people to even violate laws!” said on August 8, 2004:

“Ever since Sri Lanka's economy was liberalised in the late 1970s, the private sector has been driven by the urge and need to sell, sell and sell! If you look at all the advertisements, it is intended to tempt consumers, artificially create a need when the need is not there and turn non-essentials into essentials.
In this drive and desperation to keep up with the furious pace of growing markets and competition some companies may even be violating the law - knowingly or unwittingly - using advertising creativity as an excuse. In other cases, they are selling products and tempting consumers who are in turn violating the law of the land.

A good case in point is the enticing offers by insurance companies that advertise on-the-spot payments for road accidents. Ask any policeman and he will tell you that as a policyholder of such a quick-fix insurance policy, you would be violating a basic law where accidents should be reported forthwith.
In recent months, there have been a plethora of advertisements by these insurance companies that offer insurance payments on the spot for road accidents involving your car. The scheme has caught on like wildfire as it reduces the hassle of reporting an accident to the nearest police station and then taking that police entry and claiming insurance, a routine in normal policies.

This is a very convenient scheme, which many would be attracted to. But policyholders who make use of this scheme - and don't report an accident - are in clear violation of section 161 of the Motor Traffic Act, which says every road accident must be reported to the nearest police station "forthwith." While the policyholder is liable to prosecution, the insurance company is ironically not the guilty party since every motorist is expected to be aware and observe the law or face punishment for any violation.

A senior police officer said that in addition to reporting an accident being compulsory by law, some of the other reasons why reporting accidents has become necessary are for research purposes by the police. ‘These accidents don't get recorded in the number of accidents per year which then would not provide a proper assessment of road accidents to the authorities. It is also important for the police to ascertain whether the accident was caused by malfunctioning of the vehicle, the driver's condition or any other reason,’ he said.”

The return of the compulsory police entry for all accidents for motorists would create the usual chaos in police stations. Streamlining the process is very necessary because motorists don’t have the time to waste to report minor accidents. New ways and strategies for example using IT to speed up the recording of motor accidents need to be developed.

The enforcement of these laws have been prompted by the need to collect more revenue by a cash-strapped government. The budget situation of the government is precarious going by the Finance Ministry’s Mid-Year Fiscal Position Report for 2009 which show signs of falling revenue, ballooning government expenditure and increased domestic borrowing from banks. Thus collecting taxes, fines and other dues from the public becomes number one priority for revenue-collecting agencies.

If that’s the case, then there would be more court cases or would the police have the authority to impose spot fines like in other smaller offences? Spending time in courts is a headache to the motoring public and the authorities need to look at ways in minimising this inconveniece in the case of minor accidents.

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