Insurance Helpline with Cedric Stephens

Question: My insurers cancelled the cheque to settle my claim for a stolen car on October 21. They said I did not tell them about a previous claim that I had with another insurer. On July 4, I parked my car at 9:30 p.m. after travelling from Montego Bay to Kingston and back. I retired and woke up at 7:30 a.m. the following day. I did not go outside until 10 a.m. The handyman at the complex alerted me that my car was missing. I reported the matter to the police the same day. On July 7, I filed a claim with my insurers. They offered settlement in writing and copied the bank that had a lien on the car.

This was my second car theft in less than a year. The first car was stolen in September 2007. I was held up and robbed of my laptop, other valuables and the car. The robbers forced me into the car trunk and drove off. I managed to escape and suffered bruises to my elbows and left knee in so doing. The car was recovered in Maggotty, St Elizabeth. It was written off and the claim paid. The company, however, refused to insure my other car. I insured it with another company. I did not disclose the claim. I feared that they would not insure me.

Now, I have no car, no money to pay my debt at the bank and still have to make monthly payments despite being without a car. I need a car for my job. I have been praying and crying to try to find a solution to my problem. Can you please help me?

- gweezjacko@hotmail.com

Answer: I am very sorry to learn about your problems. The physical and emotional scars that you suffered as a result of last year's robbery - probably a near-death experience - have barely healed. The second theft this year and all that has happened afterwards, have re-opened the old wounds. This time you feel that you are the victim of an uncaring, legalistic banking/insurance system.

FIRM LEGAL GROUND

Your insurers were correct to have denied your claim this year. Application (or proposal) forms for motor insurance typically ask for information about previous accidents or losses. They also ask whether an insurer has ever "declined a proposal or cancelled or refused to renew a policy" for the proposer or any other person who will drive the vehicle.

The completed insurance application is part of the insurance contract. This is one of the many things that are said at the foot of the form. Other statements there declare that all of the answers in the form are true and that "all material particulars" have been disclosed. False information gives the insurer the right to avoid the policy.

Insurers know that they are given false information about claims. As a result, they have created a database. It is known as Claims Bank (see http://www.jagiconline.com/). All claims that are reported to and/or paid by them are entered into the system. I suspect that when they routinely checked during the process of settling your claim, they found out that you had not told them about your claim last year.

SLIGHT CHANCE OF PAYMENT

Guess what? I have no way of knowing, but I feel that you have told me the truth. Because of this, I am going to suggest that there might be a slight chance to get your claim paid - based on the unusual events surrounding your two cases of theft in less than 12 months.

Your first hurdle will be to get an appointment to see the head of your insurance company. The second task will be to convince him about your honesty. Tell him (or her) the truth about both incidents and provide written evidence - like a reference from your employers, pastor, bank manager, police officer, etc - to support your case.

Your ultimate goal will be to convince the insurance company head that (a) you are not a crook; (b) you made an honest mistake (as a first-time insurance buyer?) by failing to disclose the earlier theft when you were still traumatised; and (c) that your claim should be treated on humane, not purely legal grounds.

Your first insurer paid your claim but treated you without sympathy. The second time you approached them to buy 'peace of mind' (aka insurance), they threw you under a bus.

REFUSE ACCEPTANCE

They refused to accept you because of a claim that was not of your making, one in which you were nearly killed in a society that is so affected by crime.

They could have done two things when they paid your claim. They could have given you fair warning that they were about to 'show you the door.' They could also have stated that by paying the claim and showing you the door at the same time, they were placing you at the mercy of other insurers.

I certainly hope that I have given you some ideas to explore. Best of luck!

Cedric E. Stephens provides free, independent information and advice about risk and insurance. Email: aegis@ cwjamaica.com.