Cedric E. Stephens, Contributor
QUESTION:
MY car collided with a minibus over seven months ago. The third party did not tell his insurers about the accident. They asked me to get a police report. It said the other driver was at fault. The insurers (United General, who also cover my car) wrote to the third party. They sent him a copy of the report and said that they would have to wait for his reply in order to settle my claim. I have made several calls to the company since that time. On each occasion they said that the third party has not replied. A few days ago they told me by letter that my claim would not be settled. "The third party's policy has been breached as the driver did not meet the necessary requirements as stipulated by his policy." This decision was based on information from the Inland Revenue Department. The third party has still not replied to their letter. Can you please advise me what to do?
- sinco2_2000@yahoo.com
Answer: At the end of last year, United General was the 'top dog' in motor insurance. They controlled nearly 35 per cent of the $6.6-billion market. The size of their market share suggests that they must be doing something right. This probably explains why they are your insurer of choice. Their handling of your problem, on the other hand, indicates to me that they need to work very, very hard on the claims side of the business. They are definitely not 'best of the breed' in this important area.
I do not agree with UGI's decision to avoid paying your claim. They made four errors in the process of handling your claim. As a result of this, I have no confidence in their conclusion.
Error No. 1:
Your insurers treated you like a third party instead of a customer in good standing who needed help. This is evident from the 'legal-insurance mumbo-jumbo' in their letter. The fact that your problem was not resolved appeared to be of no importance. If they had your interest at heart they would have told you exactly (a) which policy requirements were breached; (b) presented facts to explain why the third party's driver had failed to meet them and (c) offered some solutions. Instead, one is left with the distinct impression that having saved money by avoiding your claim they are anxious to get rid of you - until it is time to pay your premium.
Error No. 2:
UGI erred when they said that they needed to get a reply from the third party before settling your claim. They wrote to the third party out of courtesy - not because of any legal duty. Here is what condition number 5 of their motor vehicle policy says: " ... the company [UGI] ... shall be entitled if it so desires to take over and conduct ... the defence or settlement of any claim ... for indemnity or damages ... and shall have full discretion in the conduct of any proceedings and in the settlement of any claim ...".
Shouldn't the staff in the company's claims department be familiar with the terms of their policy? Nearly three-quarters of UGI's total premiums last year were derived from motor policies.
Error No. 3:
The person or persons who handled your claim appear to be ignorant of at least one aspect of the law that governs the conduct of motor insurance. I refer to section (8) 1 of the Motor Vehicles Insurance (Third Party Risks) Act. This change to the law was enacted 16 years ago. It prevents insurers from escaping liability "in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy ..." This means, for example, that if a motorist failed to report a mishap insurers could not avoid paying the third party simply because the event was not reported.
Error No. 4:
UGI dawdled with your claim. A wait of seven months is far too long in the age of computers, the Internet, cellphones, wireless technology and globalisation. In my opinion, you deserve far better treatment from UGI.
YOUR CLAIM SHOULD BE REVIEWED
Go to the top of the food chain. Contact the company's general manager. Ask for a review of your claim. Make sure that you give the GM a complete brief. Show her a copy of this article if you believe it will help. Ask the company to tell you in plain and simple language in writing the results of the review. If you are not satisfied with the results find another insurer.
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
