CNA Explains: What recourse can you seek if you fall into a sinkhole?

CNA

2 days ago

SINGAPORE: As the authorities begin what could be a lengthy probe into the cause of the Tanjong Katong sinkhole that swallowed a car and its female driver on Jul 26, some have raised questions about whether she has any recourse for financial compensation.
Nearby construction workers from a PUB site rescued her quickly and she was taken to hospital while she was conscious. Her blue Mazda hatchback remained in the flooded hole for a day before being lifted out by crane on Jul 27.
The Building and Construction Authority (BCA) and the Ministry of Sustainability and the Environment are conducting separate investigations into the incident. The process is expected to take several months due its complexity.
The rare incident of a sinkhole appearing in Singapore garnered much interest online, with commentators speculating whether the woman is entitled to insurance payouts if the opening of the sinkhole was seen to be an "act of God".
Also known as a "force majeure" clause, an incident is deemed to be an act of God if it was unavoidable and outside of human control. This has implications on insurance coverage.
But experts said if investigations pinpoint fault to certain parties, one could be entitled to compensation via the legal route in addition to insurance.
What is "force majeure"?
An "act of God" refers to unforeseeable natural events that are not caused by humans, such as earthquakes, lightning strikes, and tsunamis, several insurance experts told CNA.
In general, such clauses are included in certain insurance policies to exclude coverage for these events.
Great Eastern financial representative Goh Yit Beng said these clauses are usually found in motor or home insurance.
But it is rare for an event occurring in Singapore to be attributed to an act of God, said the experts.
Senior financial consultant Chen Xueyi said these incidents are more common in nations with a higher likelihood of natural disasters, such as floods, earthquakes and wildfires.
However, in most cases that happen in Singapore, liability can usually be attributed to a party, said Ms Chen, who is from an independent financial advisory firm.
For example, if someone hit by a falling tree during a bout of bad weather, it does not necessarily point to force majeure.
Ms Chen said while bad weather might have been a factor, maintenance and landscaping issues can also come into play.
Similarly, in the case of a sinkhole, executive wealth manager Crystal Huang said it was "purely due to natural geological shifts", insurers or third parties may deny liability and cite the incident as "act of God".
"But if it's due to leaking pipes, poor land surveying, or human error, then liability can be assigned, and claims are valid," Ms Huang, who is from Prudential Financial Advisers, said.
What do I need to take note of when making a claim?
The amount an insured person can claim and extent of assistance received will depend on each individual policy.
It is worth noting that payouts from personal accident and hospitalisation insurances are based on injury and treatment, and not fault, Ms Huang said.
This means an insured person will be able to claim an amount, subject to limits of the coverage, or be reimbursed the amount paid in medical bills.
As for motor insurance claims, such as making a claim for any car-related damage, experts said that an insurer could compensate the market value of the car if it was damaged beyond repair, though this would also be subject to one's insurance coverage.
In such cases, the insurer may first pay out the funds, then recover the amount from a liable party, experts noted.
On this point, the experts also said there is a time limit after the occurrence of the incident to make claims.
Regardless of the type of insurance coverage, the General Insurance Association of Singapore requires the driver to file the insurance claim within 24 hours or on the next working day, and to bring the car to a reporting centre approved by the insurer for inspection.
If the accident goes unreported, an insurer may repudiate liability, and may cancel or refuse to renew one's policy. The driver's no-claims discount – a discount typically applied to insurance premiums for drivers who do not make claims on their policies for a specific period – may also be affected upon renewal of policy.
Ultimately, there is no need to wait for the conclusion of any investigation to make an insurance claim, even if it is not yet determined if the incident was due to force majeure.
Can I pursue the legal route if I don't have insurance?
Even without insurance, a person could seek compensation for property damage or injuries from a responsible party if there is one.
"When unforeseen events such as sinkholes, lightning strikes, or falling trees occur, compensation hinges not only on the individual's insurance coverage —whether home, auto, or personal accident insurance, which clearly outlines covered perils and exclusions — but also on the existence of a liable third party," Etiqa Insurance Singapore's chief customer officer Joys Wiraatmadja said in response to CNA's queries.
"Crucially, even if the individual lacks insurance, they retain the right to pursue a liability claim against any responsible third party, asserting their entitlement to justice and fair restitution."
Director of BR Law Corporation Daniel Tay said that loss is "typically assessed in monetary terms to put that person in the position they would have been" before the incident occurred.
In the case of a car plunging into a sinkhole, the car value, medical fees and any possible loss of income during the medical leave period could be considered.
"A loss adjuster may be appointed by the insurer for the main-contractor for the site. It is open to the person seeking compensation to do the same including to obtain legal advice on the extent of recoverable loss from the incident," Mr Tay added.
Lawyers engaged by affected parties will send a letter of claim to the liable party. If the matter is disputed, it can be taken to court.
The Magistrate's Court can award damages of up to S$60,000 (US$46,600), while the District Court can award damages of up to S$250,000. Damages above S$250,000 can be awarded by the High Court.
Lawyer Lau Kah Hee, the co-founder and director of BC Lim & Lau, said that a person may be entitled to claim for personal injury or psychiatric injury arising out of negligence under tort law.
He said that in determining liability for such a claim, the affected person must prove several elements, including that there was a duty of care owed by the defendant, that this duty of care was breached, and that damages were suffered as a result of the defendant's negligence.
The courts will consider the specific facts of the case in determining the amount to be awarded, said Mr Lau.
In civil cases, the court will look at general and special damages. General damages takes into account factors such as future medical expenses, loss of future income, and "pain and suffering" which also includes mental suffering, Mr Lau said.
Special damages compensates the claimant for monetary losses as a result of the accident, including medical costs, pre-trial loss of earnings, and pre-trial transport costs where special arrangements have had to be made for the claimant due to his or her injuries.
Asked if an injured person could be found partially liable for an accident, Hoh Law Corporation managing director N Srinivasan said that a party could be contributorily negligent if there was some fault on his or her part. Contributory negligence would reduce the compensation sum by a proportionate amount.
"For example, if the worker saw the sinkhole and then waved to stop the driver, but she did not notice it and continued, then there (could) be contributory negligence on her part," he said.
What about personal injury claims?
While investigations could take months, legal cases could take even longer, experts noted.
The time taken to obtain compensation will vary based on investigation complexity, documentation, and potential disputes, Etiqa Insurance's Ms Wiraatmadja said.
According to the Limitation Act, a person should seek legal redress for personal injury within three years of the accident, or three years from the earliest date on which the person has the knowledge required for bringing an action.
Mr Srinivasan, who has more then 25 years of experience in handling personal injury claims, noted that those who suffered injuries would not usually make claims immediately after an accident.
"They usually will make a claim after the injuries are stabilised and the doctors provide medical reports stating whether the injured victim requires future medical treatment. It may take six months or more depending on whether the injury has healed and whether there are any residual disabilities. These have to be assessed by the doctors.
"Unlike a property damage claim such as damage to the car, which can be assessed quickly by the car workshop and a claim made, injuries need to be monitored and assessed by the doctor," said Mr Srinivasan.