'I broke the law, but still want compensation'

Insurance Helpline, With Cedric Stephens

Question: Two public-passenger vehicles collided on May 4, 2010. The crash took place because one bus ignored a stop sign. No passengers were injured. Both vehicles were insured with the same company. I did not have a PPV licence. The other driver had a PPV licence, but it was less than 12 months old. The insurer refused to settle my claim. The former owner of the bus sold it but did not change the name on the title to mine. Can you please help me?

- Anonymous

HELPLINE: When I read your message, my first response was to delete it. Why should I try to help you to recover money from the owner/driver of the other bus to repair your vehicle?

You made a deliberate decision to disobey the law and drive when you knew that you did not have the necessary permit. As a result, you were violating the law, and effectively driving without insurance. Shouldn't you accept the results of your action?

In the end, I ignored those thoughts. After all, this column promises to offer information and advice, and I am not a policeman!

THE INSURANCE ISSUES

Your insurer has no legal duty to repair your bus. This statement would be true even if you had so-called comprehensive coverage. Motor-insurance contracts grant coverage on the basis that "the person driving is permitted in accordance with the licensing or other laws or regulations to drive ... or has been so permitted and is not disqualified by order of a court of law".

Drivers of public-passenger vehicles are required by law to have PPV licences. Those persons without licences who drive run the risk of prosecution by the authorities. Claims for tens of millions of dollars from injured passengers or other persons are also likely in the event of collisions.

The accident was caused by the other driver's carelessness. Since he is the holder of a PPV licence, why then did his insurers refuse to fix your vehicle? Was their action legally justified because his licence was less than 12 months old? In the absence of information about the third party's policy, I will have to make some guesses based on what company officials told me a few weeks ago, and what I know about their policy.

The company is very choosy about the PPV vehicles and drivers that they insure. Public-passenger vehicle drivers must have had their licences for at least 24 months. If the company only became aware that the other driver held his licence for less than 12 months after the accident, and the contract says that it was to be held for a minimum of 24 months, the insurer would be legally within its rights to refuse to pay you. I suspect that this was why they refused to pay your claim.

RECOVERY OPTIONS

Obtaining recovery in the absence of insurance, or where there is an insurance contract but it is invalid, can be a long and difficult process. Victims like you, however, have choices.

They can:

1) Retain the services of a claims consultant;

2) Appoint an attorney to handle the matter; or

3) Undertake the recovery on their own.

Each choice has its own advantages and disadvantages. For example, the plusses of Item 3 are that you will not have find any money upfront to pay fees, and neither the claims consultant nor the attorney will have the drive and commitment to get a settlement like you.

On the other hand, inexperience in handling these matters, and unfamiliarity with the recovery process could end up costing you money in the long run. Consider the pros and the cons of each option very carefully before you make a decision.

Motor-insurance contracts apply to named persons and are not transferable. This means that if I were to sell the vehicle that I own to you, the insurance coverage on that vehicle would not offer you any protection.

You would have to arrange your own coverage. Some persons wrongly believe that if they do not sign the certificate of title transferring ownership to the buyer, the insurance will be assigned to the purchaser.

I suggest that you contact the collectorate of taxes that is nearest to you to rectify the situation regarding the certificate of title for your vehicle.

I hope that this information will help you and other readers have a better understanding about the need to comply with the laws and regulations of the land. Further, that you can now see the link between those rules and motor insurance, and most important, will now begin to play by the rules.

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