Hidden insurance policy changes
Cedric Stephens, Contributor
QUESTION: My motor policy expired a few months ago. When the company rep contacted me I told him to renew it using the 2013-14 value. Because nothing was said I assumed that the terms and conditions remained the same. I paid the premium and collected the certificate of insurance some days later. The company sent me an endorsement to the policy by mail soon after which, for some strange reason, I decided to read. It confirmed renewal and also noted that two policy conditions had been changed. I do not understand the exact nature of the changes. Was it not the company's duty to have told me of the changes when its rep and I spoke about renewal? Can I do anything to correct the situation now?
- B.S., May Pen, Clarendon
HELPLINE: Tax Administration Jamaica (TAJ) is giving far more useful information to customers about renewing their driver's and car licences than insurers offer on theirs about renewing motor policies.
I was stunned to see TAJ listed when I conducted an Internet search to find information about the motor policy renewal process.
To be fair, an insurance company was at the top of the list. However, its focus was on selling policies. There was nothing about what consumers should do to renew a policy. TAJ, on the other hand, explained the actions that customers should take to renew their licences.
In the end, the information that I got about the motor renewal process came from the website of a foreign insurer.
MOTOR RENEWAL PROCESS
Providing information about the renewal process of a motor policy contract is important for many reasons. One is that it helps customers to plan more effectively. Another is that it can serve as a training tool for employees. A third is that it tells customers what to expect.
Here is an extract of what the foreign insurer tells customers:
"If we are in a position to offer you insurance for a further period of one year upon expiry of your policy, we will send you a renewal notice 45 days before the expiry date, inviting you to renew your insurance.
Our customer service representatives/your authorised insurance agent will call you 30 days before the expiry of your policy to make sure that you have received your renewal notice and to ensure that your personal details, vehicle details (in case of motor insurance), home contents/structure details (in case of home insurance), insurance premium rate in your renewal notice are correct and that you understand these details clearly.
It is important that you check all your details in your renewal notice carefully since any change in these details could lead to a change in your renewal premium for next year.
Once you or your authorised insurance agent confirms your details to us, our CSR will renew your policy in our system and, in case of motor or Home Insurance, dispatch the renewed policy certificate along with the policy terms and conditions to you within 48 hours after receipt of renewal premium".
From my experience, insurers here use a similar process.
The insurer, the customer and agent/broker, in a case where an intermediary is involved, are the main actors in the renewal process. Each plays a different role.
Some persons say that insurers do not have a legal duty to issue renewal notices. On the other hand, it is customary for motor insurers to send notices to clients - much in the same way that some in the United Kingdom renew motor policies automatically.
WATER UNDER THE BRIDGE
You have not said anything about whether or not you received a notice inviting renewal. If you received an invitation, then the customer service representative should have enquired about this when you spoke. If he or she learnt that you had not received one, the changes to your policy which were being contemplated should have been explained to you at that time that you were told how much premium to pay.
If you bought coverage through a broker the same thing should have happened. Additionally, if the nature of the coverage had changed materially he or she should have given you options.
All of what I have just written is water under the bridge. The important questions at this stage are: 1) What are the effects of the changes to your policy? 2) Are you likely to be worse off because of the changes? 3) Can you buy similar coverage from another insurer at the same or a lower premium and at better terms? 4) Do you have the time and stomach to move to another company? and 5) Are you aware that if you were to terminate the contract now it is likely that you will not receive a proportionate part of the premium that you paid?
Although it may be too late to get the insurer to reverse its decision at this stage, try anyway. Write a letter or email to the company setting out the details of your complaint.
If you do not get a satisfactory explanation - at the very least - make plans to move at the next renewal. I very much doubt that your 'navel string' is buried somewhere in the New Kingston area.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: email@example.com