Insurance Helpline With cedric Stephens

I am told that Canadian consumers can buy uninsured motorist coverage to supplement (normal) auto insurance. Insurers charge an extra premium for this benefit. It covers those who have the misfortune to be involved in accidents with others who are not insured. Why can't insurers in Jamaica provide this type of coverage?

- linkyk@hotmail.com.

Answer: Guess what? I do not know the answer to your question! Motor insurers in Jamaica have imported many things from overseas. Two come immediately to mind. One is roadside assistance. If the hype is to be believed, this was invented here.

The other thing is one I HATE. It is the automated telephone attendant system. In some instances, it appears to be used to give customers and claimants the runaround. I do not understand why some insurers - whose products and services do not generally win competitions for quality - believe that foreign or local voices that recite a series of numbers can deliver better service than real persons (like the world-class ones at JIIC and Globe) who handle their telephone systems.

Why insurers do not offer uninsured/underinsured motorist (UM/UIM) or supplemental uninsured motorist (SUM) coverage in Jamaica is a big mystery. It protects motorists who get into accidents with persons who have no insurance or, where the coverage is not enough. There would be no demand for it if every vehicle operating on public roads was properly insured.

Very different situation

The situation on our roads today is, however, very different from when the law was first drafted. Many vehicles may not have any insurance at all. One out of every five vehicles on our roads falls into this group. Additionally, and many persons are unaware of this, where insurance exists, the coverage may be too low.

Motor policies provide limited coverage. The limits for property damage (P.D.) and personal injuries (P.I.) are fixed. The P.D. limit of say, $2 million is less than the price of a mid-size SUV, let alone a top-of-the-line "crissas." Limits for P.I. are also inadequate. At $3 million for any one person and $5 million for any one accident, they are a small fraction of the amounts that our courts award for injury claims. Ten million dollars to one individual would not be considered rare now based on previous judgments. This is one reason why the term comprehensive motor insurance is wrong.

What options do those who get into accidents with uninsured or underinsured persons have? The choices include:

Seeking remedy through the court system;

Trying to recover directly from the other party; or

Absorbing the losses.

Options 1) and 2) are unfeasible in my opinion. Based on reader feedback and what other persons say, it appears that most motorists self-insure their UM/UIM risks by default.

Most of the elements for UM/UIM/SUM coverage are already in place, according to my research. However, when I tried to speak with industry officials to get some reasons for its absence from the market, I ran into a roadblock. None of the persons that I tried to talk with (after I overcame the trials of their ATAS) returned my call in time for me to meet my editor's deadline. In the other cases, the virtual gatekeepers frustrated me. Maybe my experience is saying that insurers are not listening to their customers.

Finally, I would like to hear from readers whether or not they would be willing to pay an extra premium to buy UM/UIM/SUM coverage given the limited protection which is offered under the basic policy.

Cedric E. Stephens is an independent insurance consultant that provides free information and advice about risks and insurance. Contact him directly at aegis@cwjamaica.com