Seeking closure on insurance dispute? Try mediation
Published:Sunday | October 30, 2011 | 12:00 AM
Insurance Helpline, With cedric Stephens
Question: I have a dispute with my insurer that is three-years old. It concerns a collision between my Toyota Hilux and a third-party Toyota Hiace. The incident occurred on the Spanish Town bypass. This was on the northbound approach to Bog Walk, about 600 feet from the railway crossing. That part of the road is marked with a single unbroken white line. The road is two lanes wide for approximately 30 feet, then becomes a single lane. My vehicle signalled that it was making a left turn. The other driver tried to 'undertake' mine. He crashed into the left side of my vehicle and caused damage estimated at $85,000. My insurer concluded that my vehicle was at fault. I disagreed. The third-party-driver failed to practise basic road safety. He was driving at an excessive speed and failed to pay due care to the road and vehicle that was ahead. Can you help me to resolve this matter?
Question: I have a dispute with my insurer that is three-years old. It concerns a collision between my Toyota Hilux and a third-party Toyota Hiace. The incident occurred on the Spanish Town bypass. This was on the northbound approach to Bog Walk, about 600 feet from the railway crossing. That part of the road is marked with a single unbroken white line. The road is two lanes wide for approximately 30 feet, then becomes a single lane. My vehicle signalled that it was making a left turn. The other driver tried to 'undertake' mine. He crashed into the left side of my vehicle and caused damage estimated at $85,000. My insurer concluded that my vehicle was at fault. I disagreed. The third-party-driver failed to practise basic road safety. He was driving at an excessive speed and failed to pay due care to the road and vehicle that was ahead. Can you help me to resolve this matter?
HELPLINE: Your briefing about the accident was of a very high standard. After I read the four files I had a good idea where the collision occurred and why you strongly disagree with the insurer's decision.
I note also that you went to the top of the 'pecking order' of your insurer. This failed to produce a review of the claim, in spite of your 20-year history with the company. Some insurance company CEOs refuse to get their hands dirty handling claims. My strategy was simple. I asked the company's top claims official to take a look at your file and to advise me of her findings.
insurer's response
Here is an edited version of the response that I received a few days later: "We cannot say with certainty that our insured's driver is blameless ... (he) could have taken greater care to properly indicate his intention to turn left - e.g., he could have used his hand to slow or stop traffic behind him. A wide turn can be mistaken as a right turn and if proper indication is not given, a collision could easily result. The impact to the front left hand corner of the insured's vehicle would suggest that the driver made a very wide turn, so much so that a motorist could mistake it for a right turn.
"On the other hand, the third party could be blamed for not exercising due care and sufficient attention. There could have been an error of judgement on his part. On this basis, we proposed a contributory settlement which has been rejected by the insured.
"As a decision on liability would depend on the evidence available, we suggest a process in which the parties openly reveal their accounts of the accident. Mediation would be ideal. Litigation should be a last resort given costs and lengthy time involved.
"If the decision is to go to mediation, we suggest neutral grounds such as the Dispute Resolution Foundation premises (located on Camp Road) and an experienced mediator. At mediation, it should be absolutely clear that any decisions reached would be binding on the parties.
"At this point, the third party's insurer ... is not aware of this proposal but in your deliberations with our insured, if the suggestion is accepted, then we will communicate the proposal to them. We trust that you will be able to assist us in the process of resolving the present dispute."
Mediation, according to About.com (www.http://biztaxlaw.about.com/od/glossary), "is an informal dispute-settlement process conducted by a trained third party, called a mediator. It is intended to bring two parties together to clear up misunderstandings, find out concerns, and reach a resolution. The process is voluntary ... .
"During the mediation, each side will present its view of the issue, and the mediator will work with each side (in an) attempt to work out a settlement. At the end of the process, the mediator can present his or her findings and present a potential solution to the issue. The mediation process, unlike arbitration, is non-binding; that is, the mediator does not impose a decision on the parties, but he or she attempts to present a solution that is acceptable to both parties."
The insurance industry regulator, Financial Services Commission, encourages the use of mediation to settle policyholder-insurance company disputes. This process makes a lot of sense.
It is often quicker and cheaper than going through the court system which is often plagued by long delays and hefty legal bills. I spoke with a staffer at DRF. She stated that each party to the dispute paid a standard rate for mediation of $25,000 for the first three hours plus $5,000 per hour thereafter.
Given the (a) direct and indirect costs that are likely to be involved in mediation (b) the fact that you were not driving at the time of the accident and (c) the sum of money involved (say $100,000 - that is, $85,000 plus loss of use and other expenses), it may appear unwise not to accept that your driver may have contributed to the mishap.
On the other hand, if the collision occurred near to a road junction and your driver had signalled his intention to make a left turn, then the driver of the "undertaking" vehicle would be totally to blame. Mediation under those circumstances would make sense.
Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. aegis@cwjamaica.com SMS/text message to 812-7233