Question: At least two accidents have taken place on the roads recently in which many persons were hurt or fatally injured. Fourteen persons died when a truck went off the road in Portland before Christmas. Other passengers also suffered injuries. Three persons were also killed in a collision in St Elizabeth at the start of this year. Two other occupants of the car are in hospital. Will the injured or the dependents of those who died get any money from the insurance on the vehicles?

- BS, Mandeville.

Answer: The legal system determines whether the victims of motor-vehicle accidents get paid. It consists of laws, the courts and the practices and traditions of the legal profession.

The laws and traditions were built up over many years. Add to them the contracts of motor insurance (policies). They vary from insurer to insurer.

They also differ among vehicles. It is impossible to answer your question with a yes or no. Even if I replied yes, I could not say how much the victims would get.

Your question highlights the need for a revision of the limits in the Motor Vehicles Insurance (Third-Party Risks) Act.

It contains an outline of what motor-insurance policies should include to comply with the law. Many persons are unaware that the law mandates minimum - not maximum - standards.

I wrote on June 22, 2008, in a response to a question posed by a reader in Cayman, that the minimum liability limits in the local law were "silly".

Personal injury

For personal-injury claims they are $1 million per person; $3 million for any one accident.

The property damage limits are $500,000 for any one person and $1 million for all claims. These limits do not make sense.

Claims for personal injuries routinely exceed the limit in the act.

Lawyers and others in the judicial system are aware of this. They know, for example, that in December of last year, the Supreme Court ordered the Government to pay a 20-year-old man $40 million. He had been shot in the back by a policeman.

Multimillion-dollar court awards for personal injury are now the norm. The Barbadian government recognised this fact five years ago. The personal-injury limit in its Road Traffic Act was increased to BDS$30 million - an amount that is 400 times bigger than the limit in our law. Insurers there impose a limit for property-damage claims for the equivalent of J$40 million.

Motorists can protest themselves

Insurance buyers should take, steps to protect themselves. The low limits in the law do not protect them from lawsuits from accident victims in cases where the policy limits are not enough.

Insurance-company sources have told me of instances where this has taken place. It is actually quite easy to buy more coverage. All you have to do is ask your insurer or broker. One insurer, for example, charges $7,500, excluding GCT, for an extra $15 million worth of coverage.

I reckon that the accident victims and their dependents will 'suck salt'.

This assumes several things: that the vehicles were insured; the drivers had proper licences, and, that standard limits for personal injuries apply.

At best, the money which may become payable under any insurance contract would have to be divided between the victims.

The aim of the Motor Vehicles Insurance Act is to provide a safety net for the victims of motor-vehicle accidents.

It is not performing its functions in an efficient and effective manner. The authorities should be aware of this fact.

The central bank acted twice between last October and December to increase interest rates.

Similar action is needed to protect accident victims and their dependents. The number of persons who are killed or injured in traffic accident is, after all, on the rise.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. Email: aegis@cwjamaica.com.