Insurance Helpline With Cedric Stephens: Motor claims said to be skyrocketing

On November 24, 2009, I was travelling down Hope Road on my way to Market Place on Constant Spring Road. On reaching Devon House, I found myself in the middle lane. The traffic lights were on red. As we waited, I noticed a car behind me had its right indicator light on so I put mine on as well. A good Samaritan allowed the car behind me to change lanes. On seeing my indicator, he allowed me to do the same.

As we entered the congested intersection, all the vehicles that were ahead, including mine, came to a stop. The 1993 Suzuki Swift that was behind me didn't. It pushed my Toyota RAV4 into the back of a taxi. I reported the accident to the police and to my insurers.

On February 14, 2010, the third party's insurers said that they had no record about the accident. My insurers have swept the claim under the carpet. Whenever I call, they promise to check and call me back but no one ever does. I had to seek medical attention for a moderate whiplash injury that I sustained in the accident. I have been without my vehicle for almost two years. Can you please help me?

- hylton_cobran@hotmail.com

HELPLINE:

Motor insurance industry sources, according to the November 9 issue of the Jamaica Observer, say that "claims have been climbing and climbing and climbing over last year and more so into this year, have skyrocketed tremendously".

Where were you hiding during the last two years? Your actions, up to now, appear to be stark contrast to how ICWI boss Paul Lalor describes the past: "When someone got a tap in the back, they'd rub it off, fix the car and everything would be all right ... (in comparison to nowadays when) you can't even touch the back of a car without somebody complaining about whiplash."

Many rear-end collisions are the result of inattentiveness on the part of the driver in the rear. It is therefore likely that the Suzuki Swift's driver would be deemed to have caused the collision. In this event, his insurers should pay to fix your vehicle and compensate you for the injury you suffered as result of the collision.

The third-party's insurers cannot legally refuse to settle your claim for the reason they stated.

Section 8(1) of the Motor Vehicles Insurance (Third-Party Risks) Act was drafted in 1989. Its aim was to prevent insurers from using the excuse that they had no record of a particular accident or that the owner/driver did not file a report to avoid paying a claim. Many persons who work in insurance companies are ignorant about the law in general and section 8 in particular.

The section of the law reads: "Any condition in a policy ... providing that no liability shall arise ... or that any liability so arising shall cease, in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy ... shall be of no effect."

The impact of this change to the law is only fully appreciated when it is read along with two conditions of a typical motor policy. The claims condition of a motor insurance contract imposes a duty on the insured to "give notice in writing ... immediately upon the occurrence of any accident".

The second condition says that "the due observance and fulfilment of the terms of this policy, in so far as they relate to anything to be done or complied with by the Insured ... shall be conditions precedent to any liability of the company to make any payment". Before the law was changed, insurers could avoid liability where the insured failed to report an accident. Also, if the report was filed late, insurers had the right to reject claims.

The third-party's insurers are therefore not on very solid legal grounds if they were to continue to rely on the excuse that the third party did not file a report about the collision as the reason for ignoring your claim.

Since you filed a report with the police and your insurers, it should be fairly simple to prove that the collision actually took place. Make arrangements to get a police report.

Once it is in your hands telephone the third-party's insurers to schedule an appointment with the aim of persuading the company that its old excuse is no longer valid. The police report, medical certificate, receipts for medical expenses, estimate for repairing your car and records of your telephone calls to the insurers should provide a body of evidence that shows your claims for personal injury and property damage are legitimate.

Given the amount of time that has passed since the accident, expect some pushback from insurers in relation to the repair estimate and the compensation for the whiplash injury. If the process of getting compensation for the collision seems scary and you feel ill-prepared to handle it, talk to a friendly lawyer or try to get assistance from a claims professional.

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.