Question:
I BOUGHT my first car last November. I insured it through a firm of brokers. They have worked with my employers for many years. Because of this I felt very secure in dealing with them. I accepted their quotation for comprehensive insurance and paid the premium. My father and I were the only persons allowed to drive. A few months later the brokers told me in a letter that I should pay $7,977.71 more. The reason was that my driver's licence was less than two years old. I queried the charge and said that I did not have the money. They stated that if I did not pay I would not be permitted to drive until April 2004 when my driver's licence would be two years' old. I agreed and did not drive the car for several weeks. On June 28 I had an accident. The estimate for fixing my car is $285,100. The brokers informed me that I am unlikely to be paid by the insurers since I did not reinstate myself as a driver. They also said that if I had paid the extra premium my claim would be settled without any problem. I am very stressed out, confused and extremely disappointed. Can you please help me?
S.P., Portmore, St. Catherine.
Answer: I know how you are feeling. If you were unable to pay the extra $8,000 a few months ago, the task of now finding nearly 36 times that amount is bound to be causing you sleepless nights. You are the victim of incompetence and poor service. In my opinion, if the brokers had any idea about customer service they would be offering to foot the bill for repairing your car.
The broker's response to my request for information about the claim was fast. It would be inaccurate to describe them as a being unfriendly. However, I have very serious concerns about their know-how. I doubt that they have the ability to persuade the insurers to pay your claim or have even made a link between the actions they took [or failed to take] and your problem.
EXAMPLES OF INCOMPETENCE
Here are some examples of your broker's incompetence. They are based on my knowledge about and experience with insurance broking and how motor insurance is transacted:
1. Motor insurance premiums are based on many variables. The age of the driver, the length of his/her driving experience, accident record, the type and estimate of value of the vehicle [in the case of comprehensive insurance] are some of the things that influence how much consumers pay. I would therefore argue that the person who provided you with the quotation made an error in calculating your premium. He, or she, ought to have obtained information from you to determine when your driver's licence was first issued in order to have calculated the premium that you were first quoted.
2. When the error was discovered several months later the brokers reacted in a 'knee-jerk' fashion. No analysis was undertaken to ensure that the insurer that was recommended was still the best deal in spite of the additional charge. The emphasis was to collect the extra money. They ignored their role in creating the error and the fact that you had paid the premium in full months earlier.
3. The person with whom you spoke about restricting the driving to your father alone made crucial errors. He/she did not make a note of the conversation with you and placed it in your file. Secondly, that person omitted to tell the insurers of your decision not to drive for several weeks instead of paying the extra premium.
4. Alternatively, the brokers appear not to have properly communicated to you the implications of limiting driving to your father and how you should reinstate coverage to permit yourself to drive when your licence was two years old.
5. The brokers omitted to reinstate coverage in April 2004 to allow you to operate the vehicle.
EXAMPLES OF POOR SERVICE
Below are three examples of why I say your broker's service was very poor They should have paid the additional premium to the insurers on your behalf since they miscalculated it. Further, you had accepted the original premium and paid it in full they several months before.
They omitted to reinstate coverage in April 2004 to allow you to operate the vehicle even though they had prior information when you your licence would be two years old.
As a first-time buyer of insurance you sought and relied on the expertise and knowledge of the brokers to guide you. However, they appear to be more intent on blaming you for what happened instead of accepting the blame for their poor service and unprofessional conduct.
I suggest that you seek legal advice. I believe that you have a pretty good chance of recovering the $285,100 if you were to file a claim of professional negligence against the brokers. It is because of their incompetence why the insurers have refused to pay your claim. End Note: You have since told me that the brokers have convinced insurers to pay your claim. I am very happy with this outcome. It illustrates a very important point. When the money and reputation of professionals like brokers are threatened they are occasionally spurred into action which at most times they studiously avoid!
This contributor provides information and advice about the management of risks and insurance. If you need free information or counsel to help you solve a problem, write to The Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com.
