Dear Insurance Helpline,
IT HAS always puzzled me about claims relating to government-owned vehicles. Police vehicles are a good example. If one should hit my motor car and was obviously at fault, I would claim through my insurers. Where do these claims go? Considering how the government operates, am I likely to recover?
S.D., Kingston.
Dear S.D.,
Where a police or any other government-owned vehicle is involved in a motor vehicle accident with a private citizen, the citizen will normally make a report to his insurers. The company would then submit the claim to the Attorney-General's Department (A-GD). This assumes the citizen had comprehensive coverage.
Also, that the cost of fixing the vehicle was more than the policy excess (or deductible). In a case where the citizen has third-party insurance or the repair costs were below the excess, he or she would have to initiate the action against the Government. The injured party could also hire a claims professional to obtain
settlement.
The A-GD is staffed by
attorneys. The process it uses to negotiate claims is similar to what obtains in an insurance company. When it is satisfied, after reviewing the police report, witnesses' statements, assessor's report and other evidence
relating to the claim that the Government, or one of its organs like the police was liable, it will seek to negotiate settlement of the claim.
Where the department and the insurers agree on a sum, the Government will issue a cheque to the insurance company. This is done in exchange for the citizen executing a release. This document prevents the
citizen from making any further claims against the Government for that
accident.
If, however, the A-GD and the insurance company are unable to reach settlement, the insurer, acting on behalf of the citizen, can seek redress in the courts.
The success of the citizen's claim is largely dependent on his ability to prove that the Government (or one of its departments) was liable for the accident. Citizens have six years in which to claim against the Government.
The A-GD acts like the claims department of an insurance company. The two follow similar processes to establish liability. The similarity ends there. Insurers are in the business of paying claims. The AG's real business is to give legal advice to the Government. Negotiating the settlement of motor vehicle claims is a small part of its brief. The government of jamaica, as a general rule, self-insures.
Part of the moneys that consumers pay insurers in premiums is in turn used to pay claims. Claims that the AG's Dept. negotiates are funded from taxes. The AG's purse strings are controlled by the Ministry of Finance.
My sense is that while the AG may negotiate claims it does not always have the funds to pay them. It has to compete with other agencies for scarce dollars. These include demands for funds to service debt obligations, pay salaries to teachers, police and members of medical profession or resources to maintain hospitals, the fire services and roads. All these claimants would get priority over the AG's demands for funds to settle claims for a car that was totaled by the police.
The Finance Ministry and the AG are, unlike insurers, not subject to any regulations that ordinary mortals like you and I know about. There are no agencies like the Financial Services Commission looking over its shoulders. As a result, it is likely that either one or both of these organs of state could engage in practices which insurers are said to do as a matter of policy: delay settling claims for as long as possible.
All claims made against the government where it is legally liable are eventually paid -- so I am told. Unfortunately, there are no statistics available which say how long it takes to settle the average claim. I hope that these comments have in some way helped to solve your puzzle.
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
