Cedric
Stephens QUESTION: I bought insurance in 1997 with VCI through a broker. Shortly afterwards the insurer went bankrupt. The broker moved my account to another company - at no cost to me. I "reinsured" with that company for two years. I then sold my car. When I replaced my car, I bought insurance from another company through a bank. The "long and the short" of it is that I paid an additional $7,000. I was allowed two years' no claims bonus - even though I earned three. My ex-brokers have given me a letter for the first year. My current insurers have refused to accept it. Can you suggest anything to help me recover the year of my no claims discount that I lost ?
S.L., Montego Bay,
St. James.
Answer: I like your question. I can help you to get back your $7,000. My second reason is selfish. The issues you describe stimulate my creativity. They touch a wide range of topics. I have written about many of them before. Your experiences since 1997 reinforce many of the things that I write about. Is this an example of 'art' imitating life? I will discuss a few of them for readers who may not have read some of my previous articles before tackling your question .
The VCI matter
Many persons lost money when VCI stopped operating nearly four years ago. You were one of the lucky ones. Your broker did the decent thing. Others had to find extra money to buy insurance elsewhere. Many persons are still facing untold hardships; their claims were never paid. This group included victims of road accidents. The "birds" have flown the co-op. As time passes, the possibility of recovery recedes. Further, it becomes much harder to punish those who were responsible. The proposed Financial Services and Insurance Acts should give regulators wide powers to prevent the same thing from happening again.
Consumers should also take some blame for the debacle. They sacrificed probity and financial security for cut-rate premiums. In the end, one always gets what one pays for.
Using an agent vs
a broker
I do not wish to bad-mouth your insurance agents. However, it is clear to me that they are not interested in your problem. Their job is primarily about making sales. It is their bread and butter. Solving problems of clients is incidental to their main job. They represent the insurers, not you. This is the difference between them and brokers. The broker's job is to solve the problems of his clients.
Not many brokers see things this way. Your former broker obviously believed this. This is why they replaced VCI at no expense to you when it went bust. This was very unusual. Brokers generally do not hold themselves as being responsible when insurance companies fail. I do not know why you decided to fire your brokers. From this distance, it appears that you were on to a good thing. You need to review the reasons why you made the switch to see if you achieved your objectives. If they were not, you know what you should do.
Proof of no claim discount
Here is what I suggest that you should do to prove to your current insurers that you are entitled to a higher rate of no claims discount. Ask your former brokers to write a letter confirming that you were insured with VCI and the other company. The periods should be stated as well as the make and registration number of your vehicle.
Find a Justice of the Peace. Make a written declaration before him/her stating that during the two periods stated in the broker's letter that you operated your vehicle without accidents. If you received no citations for traffic violations declare this as well. Send this along with the broker's letter to your insurance agents. Ask them to make a formal request for the additional no claims discount from the insurer.
If you do not get a satisfactory response, which I doubt, write a letter for the attention of the acting general manager at the company's head office in Kingston. If this does not help let me know.
Cedric E. Stephens is the founder of INSURANCE HELP-LINE, a telephone-based advisory service, and the co-host of Risky Business, a radio programme that deals with risks and insurance. If you need free advice write to The Financial Editor or Mr. Stephens at aegis@cwjamaica.com.
