Struggling against a cruel system

Cedric E. Stephens

Question: I was involved in a hit-and-run accident in January. The third party hit my car while overtaking a line of traffic in a funeral procession. The driver stopped and then sped away when I asked for his papers. I gave chase and got his plate numbers. I reported the matter to the police. My car was repaired for $93,000. My insurers paid $38,000 and I paid the balance. I lost my no claims bonus. The third party's insurers say he has not reported the accident after five months. They asked for a copy of the police report. When I gave it to them they questioned its authenticity. I am very frustrated.

What can I do? The third party was definitely insured.

­ cunnydon@yahoo.com

Answer: Sorry for the long delay in answering your question. I'm becoming like an insurance company! I am six weeks behind in dealing with my mail. This is not up to scratch especially in today's cyber world. Perhaps you and other readers should ask the editor to give me space to answer two questions each week instead of one.

Consultant economist and former Bank of Jamaica official, Dr. Gladstone Bonnick, named auto insurance as one of three sub-sectors (in the local financial sector) that are "not without actual or potential problems."

He cited "dissatisfaction voiced by motorists" as evidence of a budding crisis. Your experience confirms his argument. . As someone familiar with this sub-sector, I have long felt this way. Measures in the draft Insurance Act, 2000 and regulations pay some attention to market conduct. But they fall short of what is required - given a long history of neglect by policy makers and the regulators alike.

The third party and his insurers are so alike. Both of them have tried to "Jim screechy' you. He failed to report the accident after nearly six months. His insurers are no paragon of virtue either. They have not disclosed two important bits of information to you.

The first concerns the third party's failure to report the accident. If he were to report the claim in July they could, in theory, refuse to pay you. They could use the grounds that the mishap was reported to them late. In other words, the third party failed to comply with the terms of his policy.

The second bit of information they withheld is even more important. It wipes out the first. This is that they (insurers) are obliged to settle your claim - even if the third party has not reported it. Section 8. (1) of the Motor Vehicles Insurance (Third-Party Risks) (Amendment) Act, 1989, obliges them to do so. I find it very hard to believe that they know nothing about this Act. Their reference to the validity of the police report, in this context, is simply an excuse to keep 'stringing' you along. Their game plan is to frustrate you, so that you will abandon your claim and they end up paying 'zilch' one of the examples of the market failure to which Dr. Bonnick alluded.

Here are my recommendations to get your claim paid.

Find out the name of the company's CEO.

Make an appointment to see him/her.

Take a photocopy of this article along with a copy of the receipt you obtained when you paid for the police report.

Prepare for the meeting by listing points you wish to discuss with the CEO. This should include the names of the persons in their claims department with whom you have had contact.

Ask a friend to accompany you and to take notes of what transpires during the meeting.

If no agreement is reached at the end of the meeting to settle, or pay your claim in seven days, write to me giving the names of the company and the person with whom you met and the details of the meeting. If it comes to this stage, I will assume responsibility to get your claim settled. The system, that is, the policy makers, the third party, the police, the third party's insurer and the regulators, are "fight 'gainst".

Cedric E. Stephens is the founder of Insurance Help-Line, a telephone-based advisory service and co-host of a radio programme, Risky Business. If you need free advice, write to the Financial Editor or contact Mr. Stephens at :

aegis@cwjamaica.com

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