Compensation for Assessed Repair Time (CART)

The following is a case study published in OFS Annual report:

Ali was at a traffic light when a third-party vehicle hit his vehicle from behind. He made an insurance claim for the vehicle’s repair cost from his insurer. The repair work was completed four months after the date of the accident. Since a third-party driver caused the accident, Ali claimed compensation for the loss of use of his vehicle against the third-party insurance company (the insurer).

The insurer had assessed the loss of use claim under the CART claim and made an offer for 16 days at a rate of RM30/day. The offer is based on the Scale of CART stipulated under the Bank Negara Malaysia (BNM) Guideline. However, Ali wanted the insurance company to pay 121 days at a rate of RM40/day based on the period his vehicle was in the workshop for repair.

Under the BNM Guideline, the rate of CART is based on the vehicle’s cubic capacity. Ali’s vehicle cubic capacity is 998cc. Based on the scale of CART, if the vehicle is below 1500cc, the rate of CART is RM30/day. Thus, the insurer is only liable to compensate RM30/day.

The Guideline states that the number of days for computation of CART shall be based on the independent loss adjuster’s recommendation on the number of days for repair, subject to the insurer’s discretion, to apply an additional seven-day grace period for unforeseen delays.
Based on the loss adjuster’s report from Ali’s insurer, they recommended nine days for the repair period. The insurer added seven days bringing the total repair period to 16 days. We observed that the vehicle was in the workshop for repairs for four months. The loss adjuster’s report recommended supplementary parts for replacement and remarks from them regarding the Road Transport Department’s
(Jabatan Pengangkutan Jalan (JPJ) inspection requirement for the replacement of Chassis Member Rear LH.

We requested the insurer to obtain clarification from the loss adjuster whether the nine-day repair period they advised had been considered in their recommendations on additional parts and the period for JPJ inspection.

The loss adjuster reviewed and revised the repair period to 20 days. Following this, the insurer revised their CART offer to 27 days, including the seven days grace period for unforeseen delay at a rate of RM30/day.

The case manager explained that the revised offer was based on BNM Guidelines. Ali accepted the revised offer, and the parties settled the dispute amicably.