By Cedric E. Stephens, ContributorQUESTION: MY father's insurers told him to get an engineer's report for his 15-year plus car. He has a valid certificate of fitness issued by a government department. It states that his vehicle is roadworthy. Is another report necessary? Is the insurer's action legal? He has paid the premium pending the engineer's report. The insurers say even though he has a certificate of fitness their experience is that some cars on the road are unfit.
phillpa@hotmail.com
ANSWER
Your mail reminds me of a saying I learned long ago: 'The good always suffer for the bad'. Your dad, like so many of us, plays by the rules and ends up getting shafted! Insurers aren't the only ones that have failed to bring new thinking to the old axiom. Others that come to mind include the British, K.D. Knight and two stores in Liguanea. The first two assume that all local visitors to the UK are potential criminals and drug mules. The latter treat all persons who buy their goods as thieves. Buyers have to prove that they have paid for the goods in their hands after leaving the cashiers. Is it not logical that insurers should be saying all this nonsense about engineer's reports?
The requirement for engineers' report for "old" vehicles is rubbish. There is no data to support the argument. Are these vehicles (however one defines them) in more accidents than newer ones? The Transport Ministry's Road Safety Unit says that "vehicle factors" caused 1.2 per cent and one per cent of injury accidents and casualties respectively in 1999. In 2001, the police said that 3.2 per cent of all accidents involved "defective vehicles." None of the reports made any link between vehicle age and accidents. In the absence of more information, it is difficult to justify the need for engineers' reports for vehicles 15 years and older. The insurers may have statistics that prove otherwise. But they need to show us the data.
Engineers' reports are unnecessary for another reason. All policies contain fine print that read like this: "The insured shall take all reasonable steps to safeguard the motor vehicle and to maintain it in an efficient condition " It does not operate by itself. Another part of them say: "The due observance and fulfilment as they relate to anything to be done or complied with shall be conditions precedent to any liability " This means that the car has to be roadworthy before insurers are bound to pay. Insurers can refuse to pay if the vehicle was not properly maintained. The provision could apply even where consumer had obtained an engineer's report at the policy renewal date. If the vehicle was defective at the time of accident, insurers could also reject the claim. This is a good example of heads I win, tails you lose!
There is a big racket with certificates of fitness. Vehicles are "examined" and "passed" every day without ever being tested. Certificates of fitness are then issued. Insurers are justified in raising questions about the entire system. Instead of working with the authorities to stamp out the corruption the real cause of the problem insurers find it much easier to make life more difficult for all insurance consumers. Those who have corrupted the system continue to get their regular wages plus bonus.
Does your dad have an alternative? The simple answer is no. Tell your dad to pay the few hundred bucks to get report. Engineers' reports for "old vehicles" are articles of faith for the 13 insurers writing motor business in Jamaica. That there is very little evidence to support the argument that the practice makes sense or can be justified is neither here or there. It is a far simpler proposition as the British, K.D. Knight, the two Liguanea stores and the 13 insurers have shown to implement a policy of making the good suffer for the bad.
Cedric E. Stephens provides advice about risks and insurance. If you need free advice about risks or insurance, write to the Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com
