Insurance Helpline | Are poor third-party claimants getting a fair deal?
I am returning to the case about the person - the injured party - whose car was struck by another vehicle while it was parked on a road near to the town of Black River on Labour Day last year.
The claim against the third-party insurers still remains unsettled. The reasons for this are surprisingly unclear.
My decision to return to this subject was influenced largely by new information. I have also been thinking about the efficacy of the regulatory process in relation to how motor insurance claims are handled. Regular readers of this column know that I have a bee in my bonnet about the latter.
The injured party wrote me after last week's article was published, which is excerpted as follows:
I think I might have omitted important information. My car was not rear-ended. It was hit from the front. The collision occurred at night. There was a blind spot on the left (side of the road) with bushes covering the embankment, so I parked on the right where the soft shoulder is partially clear of bushes and I could park with a section of the car on the soft shoulder. My hazard lights were flashing. The collision was to the front right section damaging the entire front end (of my car) and causing it to be totalled. The section hit was on the soft shoulder.
She enquired whether this revision to her statement would materially affect my conclusion about liability. I said that it would not.
She later told me that she plans to walk away from her claim against the third-party insurers. This was due to the amount of time that had passed without any action and, apparently, a lack of confidence in her ability to negotiate settlement directly with third-party insurers. Also, she did not presently have the financial resources to retain the services of an attorney.
That information made me very angry. Abandoning the claim was exactly what the third-party insurers wanted her to do. That action would benefit the insurer's bottom line and, ultimately, add a few thousand dollars to management's profit share!
The injured party and I agreed that she would consult an independent claims professional. That person is familiar with the claims process and specialises in the negotiation and settlement of motor claims. He or she also has access to the services of an attorney. They are usually paid a fee which is often expressed as 'X' per cent of the settlement. Clients generally do not have to find money to pay claims professionals upfront because of this type of arrangement.
Funding is also locally available for civil lawsuits - see www.futureservicesja.com. According to information on the company's website, it has enabled "thousands of persons to access the formal justice system through funding and support service". There is no reason whatsoever why you have to give up your right to sue the negligent third party and his insurer because you do not have the money to pay for the services of an attorney.
Did the drafters of the insurance regulations - specifically those parts that relate to the business of settling claims - and the motor claims guidelines and best practices take into account the fact that they allow one set of players significant advantages over others as appear to have happened in this particular case?
The Association of British Insurers (ABI) is the body that represents UK insurers, much in the same way that the Insurance Association of Jamaica (IAJ) does. In 2009, ABI introduced a code of conduct that sets out how its members should treat claimants. Twelve pages of its code are devoted to how third-party claimants should be dealt with by insurers.
One provision states: "All information provided by the insurer to the unrepresented claimant should be impartial and transparent, in accordance with the principles of treating the claimant fairly and with due regard to their interests."
Why is it that the local insurance regulator's June 30, 2014 'Market Conduct Guidelines for Insurance Companies and Intermediaries' and 'Market Conduct Guidelines on Best Practice for Motor Insurance Claims' do not differentiate between unrepresented third-party claimants and other claimants? Could the omission to spell out claims best practices to third-party claimants like you, who do not have the self-assurance or financial resources to retain the services of attorneys, create loopholes that allow some insurers to game the system?
If gaps like these exist, shouldn't they be filled? Over to you, Financial Services Commission!
n 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.