Answer: You must be an attorney. Why? TV shows have taught me that lawyers seldom ask questions without knowing the answers.

You have followed that custom, but with a subtle difference. The answer to your first question is to be found in the second question!

Based on the flurry of mail that I have received on the topic of no- claims discount, or bonus (NCD/B) over the last few weeks, it seems that not much is known in insurance companies and outside about how this condition - which is a feature of how most motor policies - operates.

A no-claims discount is, according to the second edition of Carol Bennett's Dictionary of Insurance: "A reward for not claiming under a policy. For each motoring claim-free year it means a progressive reduction on the following year's motor-insurance premium until a maximum year has been reached. Maximum discounts are in the range of 60-65 per cent (in the case of the United Kingdom)."

maximum discount

In Jamaica, the maximum discount is 70 per cent.

Insurers use different words to explain how the NCD/B clause works.

One company describes what it does this way: "If you do not claim under this policy during the current period of insurance and have not claimed in the previous period of insurance, your NCB will increase by one step each year on the company's no-claims bonus scale."

If, for example, your vehicle was insured with this company, and, assuming that you had not made a claim during 2007, the insurer would have had absolutely no legal right to withdraw your discount/bonus when the policy was renewed.

On the other hand, if you did not file a claim last year, it would be wrong to have disallowed the discount this year because of the accident in March.

discounts

This is because you have not filed a claim. You merely reported an accident. Your insurers have not paid a dime to repair your car.

The third party hit your car in the back and then fled the scene.

You are clearly not at fault. It is, therefore, most unlikely that a claim would be filed against you. If this were to happen, the chances are that your insurers would tell him to "go kite flying in Afghanistan".

Discounts for careful driving can be more complicated. Customers of some insurers are offered additional benefits for loyalty. If a buyer remains with a company for a period of five years and has reached the maximum bonus, the discount will not be taken away in the event of claims unless:

(a) There are three or more claims; or

(b) The combined costs of one or more claims amount to $300,000 or more.

When (a) or (b) happens, the discount is reduced one or more steps.

There are three steps to solving your problem:

Step one involves reading your policy to find out exactly what the no-claims discount clause says.

If you discover that the insurer made a mistake by withdrawing the discount, demand an immediate refund.

The third step concerns the settlement of your claim by the third- party's insurers. Obtain the name of the person who is handling your claim. Contact him or her by phone. Get a date when your cheque will be ready. Follow him or her up consistently. Remember: The wheel that squeaks most loudly will get attention!

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, contact Mr Stephens directly at aegis@cwjamaica.com