Cedric Stephens | Claim options for a single-car collision in a hold-up
QUESTION: I was involved in a collision on July 30. It occurred because of an attempted hold-up. During a struggle with the attacker while I was in the car, my foot slipped from the brake pedal on to the gas. The car moved from a stationary position and ended up on a third party's premises after damaging a gate column and the gate. Will my comprehensive policy pay to repair my car and fix the fence? The repairs will take about four weeks. Can I make a claim for loss of use? Finally, I was told that since my vehicle was involved in a single-car collision, the accident will have to be investigated. Repairs will be authorised after that. What are my options?
INSURANCE HELPLINE: Emmy-award winning actress, Julia Louis-Dreyfus last Thursday made an announcement on social media. It read: "1 in 8 women get breast cancer. Today, I'm the one ... the good news is that I have the most glorious group of supportive and caring family and friends, and fantastic insurance."
Couple this with a report in the Jamaica Observer that same day. Athlete Michael Campbell's $3.7 million hospital bill was paid under an insurance plan for selected Jamaican athletes.
These news items highlight an often-under-appreciated fact: Insurance and insurers play an important role in helping persons to cope with the effects of catastrophic life events.
The same can be said about your unfortunate accident. Barring something unexpected, your insurers should pay most of the costs and expenses associated with the frightening experience that you had.
Many of the persons residing in the other Caribbean Islands, including Cuba, and also in Texas, Florida and Mexico, whose lives were turned inside out and upside down by the recent hurricanes and earthquakes, will have to find the funds from somewhere in order to recover to begin the long process of recovery.
They do not have insurance, or those that do will soon find out whether what that they bought was insufficient.
Comprehensive motor policies offer protection against accidental loss or damage to vehicles, and pay for liability as required by law, when the insured vehicle causes personal injury and/or damage to the property of others. Two of these three things, namely vehicle damage and property damage, occurred. Your insurers should pay to repair your vehicle based on the extent of the damage.
Assume the cost of repairing your vehicle was $1.1 million for parts and labour, and your excess or deductible was $175,000. Then, your insurers would pay $925,000 to the repairer and you pay the difference.
The cost to repair the third party's property would be handled by the insurer in a similar way. The insurers would use the repairers' estimates to undertake the concrete works and replace and/or repair the gates as the starting points for negotiating a settlement. The agreed settlement would not, however, be reduced by a deductible or excess and the insurers would cut a cheque to the third party to pay the repairers.
Costs associated with the hiring of another while yours was undergoing repairs, in the past, were considered uninsurable. Quite by accident, while visiting the website of the Insurance Company of the West Indies, I learnt that this is no longer the case. Dubbed the Backup plan, coverage for alternative transportation costs is offered as an optional extra to that company's clients who buy comprehensive insurance as follows:
No. of Days 1,600 cc Engine 2,000 cc Engine
7 $2,000 $3,000
14 $4,000 $6,000
21 $5,000 $8,500
The terms of the coverage are described as follows: "The Company will provide the Insured with alternative transportation if the insured vehicle is disabled, destroyed, or otherwise unavailable to the Insured as a result of a loss covered under Section I of this policy. The vehicle provided will be a hire drive vehicle not exceeding the cubic capacity shown on the schedule. The maximum number of days for which alternative transportation will be provided is shown on the schedule of the policy".
Coverage is triggered when an accident occurs. Once insurers have accepted responsibility for payment of the claim, they tell you where to go to hire the replacement vehicle. It is that simple.
Even though your insurers tell me that they offer something similar, there is nothing in your policy that says you are entitled to this benefit. Sorry, you will have to fund the costs of alternative transportation costs from your own pocket.
Insurers typically ask investigators to probe single-car accidents. This is because they suspect something is fishy.
Your accident was not a single-car accident. The collision was genuine and involved the property of a third party. You have no connection with that person. There are independent witnesses who can verify the accuracy of your statement to the police.
A single-car collision implies no witnesses, no third-party injuries or property damage, and that the accident was contrived to convert an asset into cash. There is absolutely no evidence that this happened in your accident. There is absolutely no need for an investigator to go poking around the place like Special Prosecutor Robert Mueller. There is no there, there!
- 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