Motor claims vs 'balance of probabilities' truth test

- A.B.

HELPLINE: The Insurance Association of Jamaica (IAJ), the industry lobby, recently published an attractive booklet Protecting your Life, Health, Property and Retirement. It is loaded with useful information. For example, it presents financial data on how insurers performed during 2008 to 2010.

Those numbers are often missing in public discussions about the price of insurance and the profitability of insurers. Life and non-life insurers earned net profit before taxes of J$13.3 billion in 2010. The latter group earned about 14.25 per cent of the total or J$1.9 billion. Life insurers recorded profits of J$11.4 billion.

The reported jacking up of motor premiums earlier this month is due in part to the poor results in the motor segment of non-life insurers. Data on the cost of claims for stolen motor vehicles were also supplied.

The industry's financial results, the cost of theft claims and the premium increase provide clues about what is probably happening to your claim.

Those three pointers, however, tell only part of the story. Some consumers buy insurance to 'convert' their assets into cash. The 'conversion process' happens all the time but gets worse when the economy sours. Even though the rate of inflation slowed to 0.5 per cent for last month, the economy is still in a "sluggish demand condition," according to one analyst. When all of these conditions converge, persons who are suspected of playing the 'conversion game' face difficulties and long delays when they submit claims.

The opening comments were written before the insurer's rep and I exchanged a word about your claim. Our discussion took place after my informant conducted a review of your file. It was significant that she chose the telephone instead of sending a written reply to my email.

Your claim, she said, was uncommon. Investigations are still being conducted one year after the theft. The goal of those enquiries was to obtain answers to the issues and questions that were raised in the first investigation. A decision will be made as soon as the private investigator had completed his assignment.

Those comments had me rushing to find out what was really behind the actions of your insurers.

guilty beyond a reasonable doubt

In our legal system, the Crown in criminal cases has to prove that the accused is guilty beyond a reasonable doubt.

Reasonable doubt is the highest standard of proof used in court. In non-criminal or civil lawsuits, the standard of proof is lower. It is based on a "balance of probabilities".

In the case of insurance contracts, the burden of proof for proving that a claim is valid rests initially and squarely on policyholders. It is their duty to prove that the loss (or damage) occurred in accordance with the terms and conditions of the policy. The mere act of saying that a loss occurred is not sufficient. This is why policies often say that "persons claiming ... must give full details of the incident".

What does the 'balance of probabilities' mean? It means that a judge would find, based on the evidence, that it is more likely than not that the person on whom the burden of proof rests is telling the truth. The judge does not have to be free from all reasonable doubt. He or she must be able to decide if one version of events is more likely true than another version.

Are your insurers spinning me a yarn about the delay in settling your claim? Frankly, I do not know. I have seen no written evidence that suggests why they have suspicions about the incident. On the other hand, I know very little about you or your claim except the information that you have supplied - which insurers, on the basis of their actions, appear to question.

I recommend that you find a good lawyer to help you to prove your loss if you feel their actions is not justified.

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