Advisory column: Another case for lawmakers to right a wrong
QUESTION: I was involved in an accident on February 15, 2013. It occurred at about 12:10 p.m. along Maxfield Avenue. A blue Honda motor car hit the back of my 1999 Honda Civic. The other driver and my passenger got into a row. I intervened and said that we should go to the police station. The third party drove away, but I got the registration number of his vehicle before he left the scene. I went to the station and made a report. I also filed a report with my insurer. I submitted assessor's and police reports plus a repair estimate for about $60,000. After pressing the insurance company for months, they finally sent an investigator in November. I kept asking what was happening and why I was not hearing anything. They gave me many different stories. In August 2014, they wrote saying that the other vehicle was not involved in any accident. I found out that both vehicles are insured by the same company. Also, that the driver was not the registered owner. The owner is arguing that the vehicle was not in a collision. Can I do anything to get redress?
INSURANCE HELPLINE: "Many classical and later composers," according to Wikipedia, "have written compositions in the form of variations on a theme by another composer." The same source also says "these works are called simply 'Variations on a Theme of/by...'.
Today's article is a variation on the theme of two of my previous pieces. The first one was written on January 4 this year: 'A case of justice delayed and denied?' The second, 'Unreported accidents are unjust - Lawmakers should help', was published last week.
That article was about persons who suffered intentional memory lapses which led them to 'knowingly forget' to report accidents to their insurers. The practice, as last week's article indicated, at best, severely delayed the settlement process or, at worst, prevented innocent victims from getting compensation. This continues to happen even though a law was passed over 25 years to stamp out this form of injustice.
Your case is about a motorist who has lied. He fled the scene of the accident and failed to file a report with the police. He induced his insurers - who also provide coverage for your vehicle - to believe that the collision never occurred and to treat you as policyholder of a lesser breed. This was in spite of the fact that you presented: a repair estimate, an independent adjuster's report stating that the damage to your vehicle was consistent with your description of how the collision occurred, a police report and written statements made in the presence of a Justice of the Peace from two persons who were passengers in your vehicle that the collision actually occurred.
Your insurers have accepted the third party's version of events without saying why it is more believable than yours. They appear to have completely overlooked the fact that some critics could argue that it is in the company's financial interest to behave as though the collision did not occur. I criticised the company in the January article. They undertook to review the file. Now, nearly six months later, nothing has happened. The claim still remains unresolved more than two years after the collision took place.
Uberrima fides is a Latin phrase that most persons who work in the insurance use. It means "utmost good faith". The literal translation, according to Wikipedia, is "most abundant faith". It is a legal doctrine that is applied to contracts of insurance. This phrase means that all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal.
This contrasts with the legal doctrine caveat emptor (let the buyer beware). The doctrine of uberrima fides is strictly limited in English law to the formation of the insurance contract. During the mid-20th century, American courts sensibly "expanded the doctrine much farther into a post-formation implied covenant of good faith and fair dealing. Violation of that implied covenant came to be seen as a tort, now known as insurance bad faith."
Our courts have not followed the practice of American courts. If they had, this would be a textbook example of an insurance company that has acted in bad faith. Today's article, like last week's, provides yet another example of the limits of this column. It also highlights the influence that lawmakers - and institutions like the insurance regulators - have to change the status quo and even the odds. Who will take up the challenge?
n Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: firstname.lastname@example.org.