QUESTION: I have a comprehensive motor policy. I recently had an accident. I made a claim because the other party refused to fix my car. The insurers asked me to get an estimate. It amounted to $120,000. The company told me that it was less than my excess and they will not fix my vehicle. They will, however, try to recover it from the other person.
I have since paid to get reports from an assessor and the police. My insurers have now said that the other party's insurers did not accept liability. I will have to pay to fix my vehicle. Can you tell me what is going on?
K.H., Kingston 8.
ANSWER: You are engaged in a tough and costly learning exercise. Lessons are not limited to motor insurance. They include topics, such as customer service, negligence and the duties of an insurance buyer/claimant. Issues, such as your legal remedies could also be involved. At the end of this process you will deal with future mishaps with less uncertainty and at far less cost.
AGE DISCRIMINATION
You seem surprised when insurers said the repair estimate was below your policy excess.
This tells me that you are unfamiliar with the concept. Here is what I said last week: "An excess (or deductible) is the amount of the loss (or claim) that the insured should spend before the insurer will pay. All comprehensive motor policies in Jamaica (as elsewhere) have an excess (or deductible) clause. The amount is a fixed percentage of the value of the vehicle. Most insurers here impose a minimum excess of five per cent. Deductibles are used to make the cost of insurance more affordable. If the first dollar of damage to a vehicle was covered by insurers the premium would be much higher."
Deductibles also depend on the age/experience of the insured/
driver. Persons under 25 years old and/or with less than a three-year driving history as a rule, bear excesses that are more than five per cent.
When damage to a vehicle is less than the excess, insurers are under no legal duty to pay. Some (including agents and brokers) try to get the other persons (or their insurers) to pay. Recovery of the repair and other costs succeed only where (1) the other party is insured, (2) the insurance covers the accident, and (3) the other driver is clearly at fault. Recovery is a promise. It is offered without any guarantee.
WHO CAUSED THE ACCIDENT?
The key to successful recovery is to obtain all the facts about the accident. The police report is one source of information. Careful analysis of these details is also very important. Knowledge of the road traffic laws and regulations play a part in the process of finding out who caused the accident. Was the other driver to blame? Did you contribute in some way, or were both of you at fault?
These questions must be answered before a decision can be made about who will bear the cost of repairing your car. Both the other driver and his insurers seem to be saying that you caused the accident. Do you agree? Bear in mind also that the insurance company claims official and the other driver do not have the final say on liability.
In theory, you can exercise your legal rights to sue them all the way to the Privy Council. Of course you would seek such redress only if you had evidence to support your case and the costs could be justified.
Claims preparation costs are not generally covered by insurance. This explains why you had to pay the assessor's fee and the charges for the police report.
To summarise: you will have to pay to fix your car if you caused the accident. If you can prove that the other person was at fault, then his insurers should foot the bill.
I sincerely hope that this gives you some idea of what is going on. Finally, try and spend some time finding out more about motor insurance before you spend your money.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. If you need free information or counsel to help you solve a problem, write to The Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com.
