Cedric Stephens, Contributor
Question: I was involved in a car accident in which the driver died and I was left paralysed. I filed a claim. The insurance company said the car (engine) was modified and the owner failed to tell them about it. Do I have a case against them?
HELPLINE: Regular readers of this column know that I always recommend that claimants use the services of attorneys to handle personal-injury claims. There are many reasons why I do so. The insurer's response to your claim is a good example of what sometimes happens in the early stages of cases like yours .
Persons with very disabling injuries should always get lawyers to handle these matters. Do not try to negotiate settlement on your own. Since injuries like yours could result in the payment of Lotto-size amounts, they are best handled by lawyers.
Many subjects are involved in the negotiation and settlement of personal-injury claims. Among them are medical and psychological issues, economic and financial topics, and legal and insurance matters.
Lawyers who specialise in personal-injury claims use the expertise of other professionals and their own skills to try to convince insurance companies — that have their own bunch of experts — why they should pay a claimant and how much they should pay.
Many claims are settled through the process of negotiation. This may take a long time. If negotiations fail, the matter may end up in the courts. The settlement process could involve even more time.
The remainder of this article will look at the insurance issues. In order to do so properly, the question that follows should be answered. Did the action of the motor vehicle owner to modify the motor vehicle and the owner's failure to tell the insurer about it give the insurer the legal right to avoid liability to a third party -you- under the terms of the motor insurance contract?
The answer can be found in the Motor Vehicles Insurance (Third-Party Risks) Act. This law sets out the rules under which the business of motor insurance is to be conducted.
Section 4(1) of the act says: "It shall not be lawful for any person to use, or to cause or permit any other person to use a motor vehicle on a road, unless there is in force in relation to the user of the vehicle by that person or that other person, as the case may be, such a policy of insurance in respect of third-party risks as complies with the requirements of this Act."
Some of the features of that insurance are listed in Section 5(1).
Insurance-company employees are generally familiar with these parts of the law.
From my experience, many persons who work in the claims departments of these companies are ignorant about the provisions of Section 8(1). It begins: "Any condition in a policy issued or given for the purposes of this Act, providing that no liability shall arise or that any liability so arising shall cease, in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy ... shall be of no effect."
Subsection (2) is particularly relevant to your case. It lists eight additional things that "shall be of no effect" where "a policy purports to restrict the insurance". Among those items are: "(b) the condition of the vehicle; or (f) the horse power or value of the vehicle".
It concludes by saying that "any sum paid by an insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this subsection shall be recoverable by the insurer from that person".
The insurer may have the right under the terms of its policy — which I have not seen — to refuse to pay your claim. On the other hand, Subsection 8(2) of the act prevents the company from exercising that right. They are not entitled to use the vehicle owner's failure to disclose the modification of the engine to them as a reason for not paying your claim. In other words, their position on your claim does not appear to be correct.
Get a lawyer
Round two of your battle to get compensation for your injuries should involve retaining the services of a competent attorney to represent you. Ask three of your more trusted friends to make recommendations.
Discuss your case with them separately. Get estimates about the length of the recovery process, fees (including contingency fees), etc.
Make a selection after you and/or your friends have conducted thorough interviews. Finding the right professional to help you is a big part of resolving the many problems that you face.
Cedric E. Stephens provides independent information and free advice about the management of risks and firstname.lastname@example.orgSMS/text message to 812-7233