Insurance Helpline | Poor third party claimants have to wage war to get paid
Are poor third-party claimants getting a fair deal from motor insurers? This question was asked some two months ago in one of my articles.
The context: The car of a St Elizabeth motorist was written off while parked and the hazard lights were flashing. The collision occurred on Labour Day 2015. The other driver reportedly stank of alcohol.
Surprisingly, he was not slapped with a driving under the influence charge at the police station. More bizarrely, his insurers said that they "were trying to get a response from him about the police report" many months later. This was necessary for them to make a decision about liability.
Based on the experiences of the victim, it now appears that the problem involved more than just insurance. The negligent driver seems to be using his social and economic status to manipulate the motor insurance compensation and judicial systems to the detriment of the other motorist.
The latter does not have the stomach nor the funds to wage the fight that she is likely to win.
The motorist who caused the accident word on the street says he has been involved two other accidents has now given his insurers a response. He does not contest the accuracy of the police report. Instead, the driver threatens that "he will be taking legal action ..." against the victim of his carelessness.
Even more odd, his insurers say that they are now waiting for him to confirm that to them in writing. What happens if the confirmation is never sent or, if it is sent 24 months later? This seems like a case of the tail wagging the dog.
Insurance companies are big alpha dogs. They control their tails; they run things not
policyholders. To prove this point, here is an excerpt from a typical motor insurance contract in relation to the handling of claims:
n "No person claiming under this policy must admit to, negotiate on, or refuse any claim unless they have written permission from us.
n We can take over and conduct the defence or settlement of any claim; and take proceedings at our own expense and for our own benefit to recover any payment we have made under this policy."
These statements are crystal clear. The words 'us', 'we' and 'our' all of them referring to the insurer have been used five times. Responsibility for the control and management of claims is shared only when insurers agree to do so. Otherwise, the insurer is the boss.
The driver of the other
vehicle is clearly threatening to use the judicial system to prevent the other driver from getting compensation from his insurers for an accident that he (the negligent driver) caused.
The claims consultant that I recommended the victim retain, writes that the third-party insurers have indicated that "should they consider settling your claim (the victim's) that would prejudice their insured's case. Their hands are tied ...".
What if the negligent driver were to lose the case? Would the insurance company stand by and do nothing in the meantime and not exercise its contractual right to "conduct the defence or
settlement of any claim"? The 'their hands are tied' argument is nonsense.
The claims consultant also says: "I would normally have our attorney issue suit on your behalf (against the third party and his insurers) on a contingency (fee) basis. However, as ... your claim is below $300,000, suit cannot be filed in the Supreme Court here in Kingston but would have to be issued in the Resident Magistrate's Court in Black River ... where the accident occurred and where the third party resides. This case would be uneconomic for a Kingston-based attorney to handle.
"If the third party filed a claim against you, then your insurance company would, no doubt, file a defence and would, possibly, include a counterclaim on your behalf. However, the third party could take years to issue suit, if ever.
"Another alternative is to locate an attorney in the Black River area who may be willing to accept your case on a contingency fee basis ... since your vehicle was parked at the time of the accident, there should be no problem in attributing liability to the third party driver. Please contact an attorney on High Street, Black River. One or more of them may agree to accept your case without you having to pay any money up front." I concur with the consultant's advice.
According to Jeanne Charn and Richard Zorza, authors of Civil Legal Assistance for All Americans, "ordinary people who attempt to navigate a system designed for expert advisers and intermediaries quickly learn that the law does not work for them".
The same thing can be said about ordinary people in Jamaica, as the particular case clearly demonstrates. New Attorney General Marlene Malahoo Forte, a former magistrate, would agree. According to the April 13 issue of this newspaper, she recently stated in respect of the judicial system that "some use the various delay tactics and manipulate the systemic weaknesses to their advantage and to the frustration of others".
The folks in the insurance division of the Financial Services Commission (FSC) the insurance regulator appear to be oblivious of the things Mrs Malahoo Forte speaks.
This is one reason I will continue to criticise the leadership of the FSC for its failure to properly and comprehensively address the matter of how motor claims are handled, as regulators in other jurisdictions have done.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or
counsel, write to: aegis@