Insurance Helpline with Cedric Stephens

Question: On October 24, 2007, I made my way to the exit of the firm's car park. The car of a male visitor struck mine. The damage was mostly to its front left fender. I was about six months pregnant.

I remained in my car for about 10-15 minutes. The other driver did not approach me.

After composing myself, I left the scene. I knew that I would get his particulars the next day. I found out that he and I were insured with the same company.

My insurers paid my claim less the deductible. The other driver, a well-known pastor, did not report the accident. He is now claiming that I hit his car. My premium has since skyrocketed.

What is the role of insurers in cases like these? Is it not their job to find out who is liable and who is not?

After the ordeal, I strongly believe that insurers are all about collecting money. They have little concern about serving customers' needs. No one from the insurer has visited the scene of the accident as yet.

- georgia.kalawan@gmail.com.

Answer: Your insurers and the clergyman had a close shave. They appear not to have noticed it.

They were very lucky that you, or the child that you were carrying at the time, were not injured. Had that happened, they would be facing a multimillion-dollar lawsuit.

This assumes that you would have made a personal-injury claim against the other driver. Since you did the decent thing and did not fabricate a claim, their employees are treating you, probably in ignorance, with callous indifference - very much like the so-called man of God!

Whose interest?

When two vehicles that are insured with the same insurer collide, they create a conflict of interest for the company.

Whose interest does the insurer serve in cases like these? Is it the insurer's, the two drivers, or one member of that group?

Is there any evidence that insurers do not use these types of mishaps to put their interests first and do harm to their customers in the process?

The motor-insurance market is highly concentrated. Five of the 11 registered insurers control over 80 per cent market share. One company has over 26 per cent.

The probability of same-insurer collisions is, therefore, fairly high. Are the employees of your insurers incompetent? Or, are they simply taking steps to protect their employer's interests?

Section 8 (1) of the Motor Vehicles Insurance (Third-Party Risks) Act provides guidance to companies about how they can go about dealing with same-insurer collisions, even though it was not passed with cases like yours mind.

It says: "Any condition in a policy - providing that no liability shall arise - or that any liability so arising shall cease, in the event of some specified thing being done after the happening of the event giving rise to a claim under the policy, shall be of no effect."

If they wished, they could have paid your claim for property damage (including the deductible) under the man of cloth's policy, even if he had not reported the accident to them. Why wasn't this done?

Companies also have the power to settle same-insurer collisions claims from another source: their contracts.

Motor policies always say: "The company shall be entitled, if it so desires, to take over and conduct the settlement of any claim, and shall have full discretion in the conduct of any proceedings and in the settlement of any claim."

An insurer can play the role of a paymaster and a piper whenever it wishes. Why were your insurers reluctant to use their power?

Roll-back of premium

Write a letter to your insurers. Tell them what you know about Section 8 (1) of the Motor Vehicles Insurance (Third-Party Risks) Act. Let them know that you are familiar with the claims condition of your policy.

If the clergyman has not reported the accident or found the time to visit the scene since last October, he is unlikely to do so in future.

Tell them to charge the total costs that you bore in relation to the accident to the third-party's policy. They should use their powers under the law or their contract.

Ask them to roll back the increased premium that they charged you. It should be levied against the pastor. His behaviour was not different from that of an irresponsible route-taxi driver.

Cedric E. Stephens provides free, independent information and advice about risk and insurance. Email: aegis@cwjamaica.com