Insurance Helpline | Are local claims practices in line with global rules?
QUESTION: In July 2015, my friend was involved in a three-vehicle collision along the Mandela Highway. She was on her way to Kingston. Her Mitsubishi Galant was struck in the back by a Toyota Hiace. An employee of a prominent security company was driving. The Mitsubishi was pushed into a Toyota pickup, which sustained very little damage due to a heavy metal bar.
The Hiace driver claims that he was hit by a white truck, which caused his vehicle to rear-end my friend's car. No information is available about the owner/driver or licence number of the truck. The driver also said that the truck driver "used the soft shoulder to make good his escape".
The Mitsubishi was uninsured and was writtenoff for over $600,000. The pickup driver has never filed a claim. There was no evidence that the Hiace was hit from behind. There were no independent witnesses. The insurers of the vehicle that hit my friend's car have refused to pay for the Galant. They say that their policyholder was not at fault. What can my friend do to get justice?
INSURANCE HELPLINE: The tale about the white truck is a lie. The Hiace driver made it up to escape blame for the collision. His 'it wasn't me!' excuse has worked. Six months later, your friend is still out-of-pocket. As more time passes, the odds of getting compensation from the at-fault driver or the security company and/or its insurers, lessens. She is likely to end up with a big hole in her pocket.
It will be an uphill battle to prove to the third-party insurer that: I) the Hiace driver was lying about what actually happened; and II) they should pay your friend's claim for the loss of her vehicle.
The best course of action is to look carefully at how the company handled the claim.
Useful information about how accidents like your friend's should be approached in order to find out who was at fault can be found at www.injuryclaimcoach.com/multi-vehicle-accident.html.
It says: "Determining fault in a multi-car collision is a complex process. Each driver has a duty of care (responsibility) to the other drivers. That duty ... is to drive reasonably and prudently (carefully) ... Not exercising this duty of care is sometimes a wilful or negligent act.
"When one driver's wilful or negligent act becomes the direct and proximate (legally acceptable) cause of injuries to another driver, the injured driver (your friend) has a legal right to compensation from the at-fault driver.
"The more vehicles in the accident, the greater the degree of difficulty ... in identifying the negligent act. Who was speeding? Who was following too closely? Who was on a cell phone? Were there mitigating (explanatory) circumstances? Was there more than one negligent driver?"
Were these common-sense rules applied by the persons who handled the claim at the insurance company? Was the investigator seeking information to support the Hiace driver's statement instead of finding out what really took place? Was your friend's claim mishandled? Could all three things have affected the insurer's decision not to pay?
The Financial Services Commission (FSC) has prepared two documents that set out rules regarding how claims should be handled. One is its 2014 Market Conduct Guidelines for Insurance Companies and Intermediaries. The other is Market Conduct Guidelines on Best Practices for Motor Insurance Claims. None of them offers anything specific that helps one to question the manner in which your friend's claim against the third party was handled by the insurers.
Jamaica is a member of the International Association of Insurance Supervisors (IAIS). The FSC represents it on that body. According to the FSC's Keron Morris, manager of the Office of Communication, and International Relations, in a letter to this newspaper published on October 4, 2015, the commission "operates within the dictates of best practices and standards as promulgated by the IAIS".
Can any of the IAIS standards or rules be used to question how your friend's claim was handled?
Seven of the IAIS' 2015 Insurance Core Principles that apply to claims handling (on page 300) are germane. These are:
1. 19.9.1: "Supervisors (like the FSC) should require that insurers have fair and transparent claims handling and claims dispute resolution procedures in place."
2. 19.9.3: "Claimants should be informed about procedures, formalities, and common timeframes for claims settlement.
3. 19.9.4: "Claimants should be given information about the status of their claim in a timely and fair manner.
4. 19.9.5: "Claim-determinative factors such as depreciations (sic), discounting, or negligence (which is the point of dispute between your friend and the third-party insurers) should be illustrated and explained in comprehensive language. The same applies where claims are denied in whole or in part.
5. 19.9.7: "A fair claims assessment requires appropriate competence of insurers' and where applicable intermediaries' staff who are involved in claims settlement procedures, as well as ongoing training.
6. 19.9.8: "Competence requirements for claims assessment differ depending on the type of insurance policy and generally include technical and legal expertise.
7. 19.9.11: "Supervisors may encourage insurers to ensure that relevant policies are in place by establishing a Claims Redress Committee acting as an appellate body within the insurer to promote fair play and objectivity in the decisions."
Your friend should seek an appointment with a senior claims official at the third-party insurer. Ask the official to undertake a review of the manner in which your claim was handled having regard to the seven rules that I have cited. If the outcome of the review does not satisfy your friend, file a complaint with the FSC.
Finally, tell your friend to expect a strong pushback about the damage to the Galant since it was damaged in slow-moving traffic.
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