Dysfunctional traffic regulation

Cedric E. Stephens, Contributor

Question: I have been the victim of four accidents involving taxi men. I have had to pay despite the fact that those drivers were at fault. The latest incident involved a driver who swerved into the side of my vehicle. He was travelling in the opposite direction. He did not stop, but I caught up with him after giving chase. He had no car documents. However, the vehicle carried a sticker from The Transport Authority. I used it to get information. I made a report at a nearby police station. The third party denied ever being in the accident. The police report and the photos that I took disproved that. When I went to re-insure my vehicle, the insurers said that they could not apply the 60 per cent no-claim bonus that I had earned over the years, as they have not yet recovered. Another insurer told me that they could not insure me as I had recently had an accident. What is the industry doing about undisciplined drivers and often-uninsured taxis? Isn't the decision of some of its members to refuse to insure public passenger vehicles part of the problem? What action can I take to help myself?

- S.M., Port Antonio PO, Portland.

HELPLINE: First things first: I am not the mouthpiece of the insurance industry. On the other hand, your (implied) criticism of the industry seems unfair. The problem is far more complex than you have made out.

Here are some reasons for that comment. Nearly four years ago, Al Richards wrote a letter to this newspaper. In it, he said that the police had "over 150,000 summonses for motorists who failed to show up at court or (who) failed to pay their traffic fines ... that translated into over J$200 million".

In July 27 of this year the Transport Minister reported to Parliament that "outstanding fines for traffic violations now amount to more than J$3 billion. Last year, 225,843 traffic tickets were issued.

North West St Andrew MP Derrick Smith in an op-ed piece in this newspaper on July 26, named some of the things that contribute to the problems on our roads. These were: poor road conditions, poor driving habits, the use of telephones and DVDs while driving, the absence of up-to-date safety standards, poor condition of tyres and the "widespread" use of drugs - including alcohol - especially among operators of public passenger vehicles.

New law

The drafting of a new law to replace the Road Traffic Act, he believes, will make enforcement much easier.

Smith, a former minister of national security, appears to be unaware that "the whole aspect of traffic regulation is not working". Transport Minister Mike Henry made that comment when he was discussing the non-collection of traffic fines.

Motor insurers are affected by the problems on our roads. These conditions have contributed to the losses that they have made on this line of business over the last decade. Partly as a result of those losses, there are now fewer companies that write coverage for PPVs than there were in previous years.

The problems are not unique to Jamaica. In Trinidad & Tobago the industry lobby group recently stated that problems on their roads, as well as fraud, have impaired the financial health of some insurers, especially those that write taxis.

Various strategies have been developed over the years in other countries to make their insurance markets function more effectively and reduce the number of uninsured vehicles that operate on the roads. They have had varying degrees of success.

Here are two things that you can buy to protect yourself:

1. Uninsured Motorists coverage. It protects you in the event of an accident where an uninsured driver is at fault. We'll fix your vehicle at no cost to you — you pay no deductible, you keep your hard-earned no-claim discount and your premiums remain unaffected. The cost of coverage for J$2 million is J$4,000 per annum.

2. Accident Forgiveness. For an additional J$3,950 per annum you can safeguard your no-claim bonus. Forgiveness will apply even in a case where you are at fault, and you won't lose your no-claim discount.

I believe that these benefits are available only from a few companies. Your broker should be able to point you in the right direction. On the other hand, if you buy direct, check out the website of the Financial Services Commission - www.fscjamaica.org - to get the names of the registered motor insurers. Visit their websites to get more information.

Finally, I hope that Smith and his colleagues in Gordon House will take a much broader look at the problem that persons like you face, and formulate strategies to deal with the root causes, instead of simply passing new laws.

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