Cedric E. Stephens, Contributor
QUESTION: ON June 30, my daughter was travelling in a taxi. She got hurt when another car collided with it and was treated at a nearby hospital. The accident was reported to the police and United General Insurance the next day. Both cars are insured by that company. UGI asked me to submit a police report, medical certificate and receipt for the medical bill. The total cost was $5,700. The police blamed the other driver who cut across the path of the taxi. By letter dated November 1, 2005, UGI said that "the third party breached a condition of her policy ... the driver ... did not have the appropriate licence to operate a PPV." They gave the third party's address as Lluidas Vale district, St. Catherine and said to deal directly with her. Was I treated fairly? Can any action be taken?
- derryckhenry@gmail.com
Answer: Your daughter's medical bill is a small fraction of the value of your two questions. Please allow me to rephrase the first one which appears simple, but is very deep. Is a victim's claim which arises from an accident with two or more vehicles insured with the same company always treated fairly by that same insurer? Whose interest does the insurer serve in this type of situation - its customers, the claimant's, the insurer's or all three? Given the secrecy that shrouds claims handling, do multiple-vehicle-one-insurer accidents create opportunities (in the words of an actuary who wrote to me recently) "to make up for underwriting losses on the investment side?" Was your daughter's claim treated fairly by UGI given this scenario?
NO SPECIFIC RULES
Restating question number one was easy. I have no answers to the first three that I posed. Here is what I know. There are no specific rules that say how claims are to be handled. This is in spite of the fact that in 2004 the claims bill for motor insurers was $4.7 billion. UGI, with its nearly 35 per cent market share, along with its broking affiliate Guardian, occupies what the Fair Competition Act would call a "dominant position." Its closest rival, NEM, writes 18 per cent of the $6.6 billion market. Nine other companies share the remaining 47 per cent. Last year motor insurers recorded an operating loss of $835.9 million. UGI topped the list. Its share amounted to $327.1 million or 39.1 per cent.
I have no evidence that your claim was treated unfairly. After all, I have only your side of the story. On the other hand, I do not agree with UGI's conclusion. Their letter offers no facts to support their finding that the driver breached the policy condition. In the absence of other details, it appears to be self-serving.
It would have been a horse of an entirely different colour if they had said that the vehicle was registered as a PPV and was being operated by a driver with private driver's licence at the time of the accident.
The letter makes a series of assertions none of which it attempts to prove. Is this a case of careless writing on the part of the person handling your claim or a deliberate attempt to conceal the facts in order to avoid payment?
UGI could not avoid liability if the car that struck the taxi in which your daughter was travelling was actually a 'robot taxi'. That is if it was being used for social, domestic and pleasure purposes at the time of the mishap and the driver had a licence. In the absence of more specific information from UGI one is left to speculate.
PRIVATE LICENCE
Did they find out that the vehicle they insured as a private car was being used as a taxi at the time of the accident and that the driver had only a private licence? Or, was there evidence that the vehicle that was licensed and insured as a PPV was being operated by a driver with a private licence? Was it that the vehicle they insured as a private car being used as a 'robot taxi'?
How the vehicle was being used at the time of the accident is material to the question of UGI's liability. Finally, precisely which condition of the motor policy did the owner/driver of the other vehicle breach?
The road to getting payment for your daughter's injuries is riddled with doubt given the absence of information. Dealing directly with the third party is also fraught with uncertainty. Two-vehicle-one-insurer accidents offer no guarantee of payment to accident victims. They create loopholes for unethical persons to exploit the ignorance of victims. To manipulate information to save money given the stygian blackness that surrounds the claims process. My advice: 1) Write off the $5,700. 2). Contact the insurance regulators, the Financial Services Commission. Suggest that they develop the best practices for the handling of motor claims.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. If you need free information or counsel to help you solve a problem write to The Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com
