Push back hard against unfair premium rises

Insurance Helpline, With Cedric Stephens

QUESTION: On March 13, 2010 at 10:20 a.m. while driving westerly in the left lane on Lyndhurst Road, I indicated that I would be turning right on Grove Road. In the act of doing so, a motorcycle coming from behind collided with the right front of my car. The rider and pillion passenger were injured. They were taken to hospital by the police.

A report was made to the Half-Way Tree Police Station that same morning. I also informed my insurers two days later. The company requested that I get an estimate and appointed an investigator. He visited me on April 13. I called my insurers on June 7 to find out about the status of the claim. I learnt that the owner of the motorcycle had breached the terms of his policy, as a result, the only redress I had was to sue the owner.

I decided to count my losses and repair the damage when I was financially able. My policy expired on October 10. The renewal notice indicated that my premium had increased by over $10,000. The company settled the third party's claims for over $350,000. This was the first time that I was hearing anything from them about the accident since June 7. Does the company have the authority to settle without communicating with the policyholder? What are my rights and how do I protect same? Should I pay the higher premium?

- patteryl@hotmail.com.

Many years ago, my grandmother told me that one of the secrets of getting correct answers was to ask the right questions. Experience and legal friends have since confirmed the wisdom of that advice. The key question to be answered about your mishap is: who was to blame?

The premium would not have increased by $10,000 had the company concluded that you were not totally or partly at fault. Issues about the insurer's authority to pay the claims of the third parties without "communicating with you" are not relevant to your problem.

Did the motorcycle rider err while he was overtaking your vehicle? Did you make a mistake in the act of turning right from Lyndhurst Road on to Grove Road? Were mistakes made by you and the motorcyclist and if so, in what proportions?

statements

These are some of the questions that experienced and properly-trained claims officials would seek to answer before deciding whether to pay third parties' claims. Those answers are normally found in drivers'/riders' and independent witnesses' statements, police reports, repair estimates, photographs of the vehicles and accident scene and independent investigator's reports including accident reconstructions.

The latter involves using computer technology to recreate collisions. The Road Code and The Jamaican Road User's Guide are among other sources of reference. Decisions about liability should be based on facts which, if necessary, can be proven in the courts.

The Jamaican Road User's Guide has this to say about collisions like yours: "When turning at a junction, position your vehicle correctly, give the proper signal then make your way cautiously looking out particularly for pedestrians" (page 44).

"Overtake on a straight road. Never overtake at a railway crossing, a road junction, corner, a corner or bend, on the brow of a hill, at a pedestrian crossing ..." (page 41).

The actions you took before making the turn, signalling and positioning your vehicle, appear to be consistent with the guide. The motorcyclist, on the other hand, seems to have been overtaking in the vicinity of where Grove and Lyndhurst Roads meet. If this was so, his actions appear to be contrary to the provisions of the road code and the guide

Since it is the duty of the overtaking vehicle to ensure that it is safe to do so, I am puzzled by your insurer's decision to settle the third party's claim. This is especially when you "made it clear that the motorcyclist was at fault" in your statements to them and to the police. What evidence does your insurer have that the collision was not due to the carelessness of the motorcyclist? Were errors made in assigning blame to you?

policyholders

Policyholders are not permitted to make any "admission, offer, promise or payment" to third parties without the insurer's written consent. Further, the insurer has the right to "take over and conduct in the policyholder's name, the defence or settlement of any claim ... and shall have full discretion in the conduct of any proceeding and in the settlement of any claim and the policyholder shall give all such information and assistance" the insurer shall require.

You'll get nowhere if you try to use the claims condition of your policy to resolve this problem.

Use market forces to solve the problem if this was your first accident in nine years. This means obtaining quotations from other insurers.

Tell them about the collision with the motorcyclist and explain why you were not at fault. Make sure that you get all of your no claims discount.

Tell your existing insurers that you were dissatisfied with the way the third parties' claims were settled and that this resulted in an increase in your premium. Ask them to conduct a thorough review of your case.

Do not make a decision to pay the extra $10,000 until after the review has been completed and you have received quotations from other insurers.

Some consumers are pushing back against actions of the banks to raise their fees. Insurance buyers should do the same when companies try to boost their income unfairly.

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Email aegis@cwjamaica.com or send SMS/text message to 812-7233.