Car valet services: What happens if your vehicle gets damaged?
Source: Straits Times
Article Date: 27 Dec 2024
Author: Ian Cheng
Lawyers said that car owners have to be clear about the scope of their insurance coverage, as standard car insurance policies usually do not cover a situation where the insured car is driven by a paid valet driver.
A man who engaged a car valet service had a “nightmare experience” after the driver allegedly hit a carpark kerb minutes after starting his vehicle, causing the bumper to fall off.
Recounting the Nov 28 incident in a post on his profile page on Dec 1, Facebook user Patrick Tan said: “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.
“Unfortunately, I recently learnt the hard way that this isn’t always the case.”
He did not name the company or the driver and was initially unable to receive any compensation from either party, although he said in a later comment in his post that the company has since reached out to apologise and assured him that the issue would be resolved.
The experience prompted him to caution: “If you think valet or drive-home services come with insurance or accountability, think again.
“Engaging such services doesn’t necessarily mean your vehicle is protected, and you may end up bearing the costs if anything goes wrong.”
The Straits Times contacted valet services, lawyers and insurers to find out what recourse drivers have in such cases.
Firms may not be insured
Drive Home Valet Singapore, also known as DH Valet, told ST that if a valet has damaged a vehicle, it would try to assess the damage first.
“If we are able to estimate the cost of the damage done on the spot, we will pay the customer. If we can’t, we will advise the customer to take the car to our partner workshop for assessment,” said a spokesman, adding that customers would be provided with a replacement car while repairs are done.
The company said it would pay the workshop up front for the repair costs, and then split the cost with the customer evenly, or a sum they have agreed on.
To prevent such incidents from occurring, DH Valet said it has strict hiring criteria for its drivers – they have to be at least 26 years old, with a minimum of three years’ driving experience. Prospective drivers are also required to go on test drives to assess their driving proficiency.
DH Valet said it does not have insurance coverage for its services as insurance companies were apparently unwilling to offer it any plans.
Know what your insurance policy covers
Lawyers said that car owners have to be clear about the scope of their insurance coverage, as standard car insurance policies usually do not cover a situation where the insured car is driven by a paid valet driver.
Mr Sam Callaghan, claims director at DirectAsia Insurance, which offers car, motorcycle and travel insurance, said that generally, there are also exclusions on motor policies for “hire or reward” purposes, which are commercial transactions.
“As a commercial transaction is taking place here, some insurers may consider refusing the claim,” said Mr Callaghan.
Mr Patrick Yeo from Kennedys Law, which specialises in motor insurance, said that when someone pays a valet driver to operate, drive or park his car, it is considered “for reward”, which immediately exceeds the scope of policy coverage for limitation of use.
“Valet services and/or their drivers should ideally be covered by separate business insurance to cover their drivers’ liability,” he added.
The terms and conditions of valet services will usually also try to exclude liabilities of their valet drivers.
“One uses a valet driver at his/her own risk in most instances,” said Mr Yeo, adding that some of these operators have been known to openly operate on a “we have no insurance” and “we have exclusion clauses” bases, expecting customers to inform their insurers that they had authorised the valet drivers to drive the insured car.
Mr Bryan Lim, associate director of Hoh Law Corporation, said that while valet drivers or their companies may be liable for damage caused by the valet drivers’ negligence, it is possible that they would not have any insurance coverage for such a situation.
As different insurance policies have different scopes of coverage, their parameters will depend on the specific terms and conditions of each insurance policy.
Some insurance policies, such as named driver plans, require the car owner to seek the insurer’s approval for other specific named individuals to drive the car in order for there to be insurance coverage, said Mr Lim.
On the other hand, some insurance policies, such as authorised driver plans, are more flexible, and can provide a broader scope of coverage, including possibly for other drivers of the car so long as they are authorised to drive the car.
What can drivers do?
Mr Callaghan said: “My advice, if people plan to be drinking, is to leave the car at home or the office and use the plentiful public transport on offer in Singapore.
“Avoid the temptation to drive, or even have to consider a valet service.”
He added that he has noticed different valet services having varying disclaimers over what they will and will not cover in the event of an accident involving one of their drivers.
“Our advice would be to find the most reputable service with adequate cover in place and a stated policy around what they do in the event of an accident.”
Mr Lim echoed the sentiment. “To reduce the risk, drivers intending to engage the services of a valet car company may want to consider engaging a service provider which represents itself to be covered by insurance, or engaging a larger and more reputable service provider, especially where the valet drivers are direct employees of the company.”
As for what drivers should consider when engaging the services of a valet company, Mr Lim said it can be difficult to know whether such service providers are covered by insurance – even if they are, the scope can be difficult to ascertain, as this is not often a topic that is discussed when first engaging a service provider.
He added that in the event of an accident caused by a valet driver, making a police report may not necessarily aid in the claims process, as the claims process will likely be more of a civil matter than a criminal matter.
Mr Callaghan said: “A police report is required only if someone is injured, the accident involves a foreign-registered vehicle, or it involves government property.
“A report may help if anyone had an ongoing dispute with the valet company. However, it would not impact the insurance process.”
Source: Straits Times © SPH Media Limited. Permission required for reproduction.
505