Car Valet Services in Singapore: Navigating Insurance Pitfalls
Singaporean drivers using car valet services should be aware of potential gaps in insurance coverage, according to experts. A recent incident highlighted the risks involved when a valet driver caused damage to a customer’s vehicle.
The Incident
Facebook user Patrick Tan recounted his “nightmare experience” on December 1, detailing an incident on November 28. After engaging a car valet service, the driver allegedly hit a carpark kerb shortly after starting the vehicle. The impact caused the car’s bumper to fall off.
Tan expressed surprise at the lack of immediate insurance coverage, stating: “My friends and I have always assumed that when you hire a valet service to drive your car home, any accidents along the way would be covered by the company’s insurance.”
While the company later apologized and assured him that the issue would be resolved, Tan’s initial experience prompted a cautionary message: “If you think valet or drive-home services come with insurance or accountability, think again.”
Insurance and Liability: What Drivers Need to Know
The Straits Times contacted valet services, lawyers, and insurers to clarify the recourse available to drivers in similar situations.
Insurance Shortcomings
One of the main problems is that many valet service companies lack insurance coverage. DH Valet Singapore, for example, revealed that it does not have insurance coverage for its services because insurance companies were unwilling to offer them any plans.
Policy Exclusions
Lawyers further pointed out that standard car insurance policies typically exclude coverage when a paid valet driver operates the insured vehicle. Claims director Mr. Sam Callaghan from DirectAsia Insurance, explained that policies often have exclusions for “hire or reward” purposes, which constitute commercial transactions. This means insurers may deny claims in such cases.
Mr. Patrick Yeo, who specializes in motor insurance at Kennedys Law, stated that using a valet driver “for reward” exceeds the scope of standard policy coverage. He also indicated that valet services and their drivers ideally should carry separate business insurance to cover their liability.
Terms and Conditions
Valet service terms and conditions frequently exclude the liability of their drivers. As a result, customers often use a valet driver at their own risk.
Mr. Bryan Lim, associate director of Hoh Law Corporation, noted that, while valet drivers or their companies may be liable for damages caused by their negligence, they may not have insurance to cover the situation. Each insurance policy has different coverage scopes, which depend on its specific terms and conditions. Some policies, such as named driver plans, may require approval from the insurer to have coverage for specific individuals. Other policies, like authorized driver plans, offer a broader scope of coverage.
Advice for Drivers: Minimizing Risk
Mr. Callaghan advised drivers to avoid valet services altogether if they plan to drink, suggesting they leave their cars at home or the office and use public transport. He further recommended selecting the most reputable service, one with adequate insurance coverage and a clearly stated policy for accident situations.
Echoing this sentiment, Mr. Lim suggested that drivers engage service providers that claim insurance coverage or choose larger, more reputable providers, especially when the valet drivers are direct employees.
Other Considerations
Mr. Lim stated that ascertaining whether a valet company has insurance can be challenging, even if they claim to. He adds that making a police report after an accident may not help the claims process; it is often a civil matter rather than a criminal one. Mr. Callaghan added that police reports are only required if someone is injured, the accident involves a foreign-registered vehicle, or it involves government property.
In conclusion, drivers should carefully assess the insurance implications before using car valet services in Singapore, to avoid unexpected financial burdens in the event of an accident.
