Question:
I insured my car with Company X for many years. Last year, I decided to move to Company B. They asked me for proof of my no claims bonus. My brokers told me that Company X would only supply a letter if I paid $575. I refused to do so on principle. My new insurers have not given me a certificate of insurance due to the missing proof. I paid the premium less the no claims discount to the brokers. I am afraid the police may arrest me if I do not have evidence of insurance or, that I will not be covered if I were to have an accident. What can I do?
- W.O., Kingston 10.
Answer:
You are right to be afraid! If a police officer can "diss" a government minister, in the presence of witnesses, ordinary folks like you and me should avoid getting on the wrong side of the law. This is even though driving without insurance is not an arrestable offence, according to my police source, Inspector Sonia James of the CCN. This kind of violation is normally dealt with by a traffic ticket and the payment of a fine.
Company X is wrong to impose a charge for supplying proof of no claims bonus without any prior notice. Even banks, which charge for everything, don't behave this way. Company X's policy is short-sighted and stupid. All insurers - inside and outside of Jamaica - have provided their ex-customers with free no-claims bonus letters for years. Consumers have grown accustomed to it. Like you, I have seen nothing in the press or heard anything on radio giving the reason for the fee. The charge may well be justified. The way they have introduced it is, however, wrong.
File a complaint against the company with the regulators. The Financial Services Commission (FSC) exists to make sure the insurance business is conducted fairly and to protect consumers. What Company X has done is unfair. When government introduces user fees or decides to increase taxes they have to tell us - upfront. Insurers are no different. They should not get away with imposing additional charges via the "back door." The next time they may change the conditions of your policy without telling you. Or, they could charge a fee - after you paid the premium - if you made a claim.
There ought to be no problem with your insurance coverage. The new Insurance Act takes care of situations like yours. It says quite clearly that where a consumer has paid premium to an insurance broker the law considers the payment as though it was made directly to the insurer. In other words, if you were to have a claim and the company refused to pay, you can get redress by complaining to the FSC.
The present situation is not in your interest. I would suggest that you adopt a pragmatic approach to solving the two problems. Pay the fee to get your no claims bonus letter from your ex-insurers. Use the receipt that you get from Company X as the basis for filing your complaint with the FSC. Make sure that your broker sends the no claims bonus letter to your current insurers. After all, they have the right, under the terms of your policy, to cancel it by giving you seven days' notice. If this were to happen, I am pretty sure that it will end up costing you more than $575 in getting coverage elsewhere.
Cedric E. Stephens provides advice on risks and insurance. If you need free information or advice to solve a problem, write to The Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com
