Insurance Helpline With cedric Stephens

Question: I am a US-based Jamaican. I have been driving here for the past 12 years. I have never had an insurance claim. Except for a few minor traffic violations, I have a relatively clean driving record. As a result, I benefit from premium discounts each time my policy is renewed. I have never had a motor policy in Jamaica even though I drive whenever I visit. I am planning to return home to live in a couple years' time. Since I have had no local driving /insurance history would I benefit from policy discounts that local insurers offer? Would my safe driving experience in the U.S. be considered or, would I be treated like a "new" driver? Assuming that my insurance/driving record in the U.S. was relevant, what information would I need to obtain from my US insurer and for what period?

- K.S., USA.

Answer: I admire the way that you think and behave. Few persons practise the habit of linking the information they obtain today into their medium-to-long term plans. And then, only a minority - from my experience - attempt to use those details to make decisions about future insurance dealings. Most non-life insurance buyers decide about these things in the closing minutes of the 11th hour. This limits their choices. What are the reasons for your abnormal behaviour? Please share your answer with me outside of the pages of this newspaper!

Question: Do local insurers place a value on a foreign licence/driving record?

Answer: Some insurers seem to place a premium on local driving experience. Why this is so is not explained. They ask questions about the local driver's licence (or permit). When was it obtained? The fact that there are many "flaws" in the system of getting a permit is ignored. The focus on local licences leaves the door open to charge more premiums to non-locals. (In a case that was referred to me, a broker told a customer to get his foreign driving permit translated into English. He could not get a certificate of insurance even though the premium had been paid). Other companies treat foreign and local licences the same.

No distinction is made between overseas and local insurance history and driving record. For example, the following questions appear on all motor insurance application forms: "Has any insurer refused to renew, declined an application?" "Have you ever been prosecuted for any offence in connection with any motor vehicle?" Those who buy coverage here and ignore their overseas record could end up in trouble. Motor insurance practice in Jamaica is, in many respects, similar to that in the U.S. Most of the 40 or so factors employed in the U.S. to fix motor insurance premiums, with the exception of credit scoring, are in use here.

Question: Will non-residents be treated like first-time insurance buyers?

Answer: It is unlikely that you will be treated like a new driver. There is, however, the probability that some companies may try to charge you more. They could say that because you drive in the U.S. on the "wrong" side of the road you may be more prone to mishaps while driving here. The same could happen if you were to operate a vehicle with the steering on the left. If this takes place, play the market. Get quotations from at least six insurers. Try to use your overseas insurance experience and driving record to your benefit (see below).

Question: How do you validate your foreign insurance history/claims record?

Answer: Most motor insurers in Europe, North America (excluding Canada), South Africa, Australia, parts of Asia and the Caribbean, offer discounts to "safe" drivers. Safe means that they presented no claims to their insurers. In Jamaica, persons without accidents for five or six years, get discounts between 50 and 70 per cent off the regular premium. To qualify, non-residents should provide written evidence. While most local insurers appear to be satisfied with a statement covering the previous five years, I would recommend a longer period if you can get. The letter should also give details of the names of your US insurers and describe any special discounts that you may have earned. Once the local insurer accepts the letter they will give you a discount. Smart buyers take the letter with them to Jamaica. It is my sincere hope that I have helped you in a small way in realising your plans to return home.

Cedric E. Stephens is an independent insurance consultant that provides free information and advice about risks and insurance. Contact him directly at aegis@ cwjamaica.com