Insurance Helpline, With Cedric Stephens
Helpline: The help that I can give will not provide you with money to repair your vehicle, pay medical bills, or reimburse your costs for hiring another vehicle. It definitely cannot be used to avoid a similar accident, or get the scoundrel - not a gentleman - who hit your vehicle arrested for driving without insurance. I can, however, help you to achieve what mental health professionals call closure on the incident. I will explain why your insurers (and brokers) have shown little or no interest in the matter.
Your insurance does not provide compensation for collision damage. Third-party fire and theft coverage is limited to third-party insurance that is required by law, plus damage to the vehicle that is caused by fire and theft. Insurers have no legal (or moral) duty to help you when the vehicle suffers collision damage. Had you bought 'comprehensive' insurance, things may have turned out differently, but the outcome would have been the same due to fact that the other driver disobeyed the law. Your expectation of assistance from your insurers was too high given the type of coverage that you had.
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Did the brokers offer you a choice between 'comprehensive' and third-party fire and theft? Were the differences between the two explained to you? Were you aware that as many as one in four or five vehicles on our roads are uninsured? Did your brokers tell you that for as little as $2,000 per year you could buy protection against motorists that were uninsured? Brokers are supposed to be aware of these things in the ordinary course of their business. Did they properly discharge their duties to you?
Two things are clear from the other driver's behaviour. The first is that he is aware that he caused the accident. The other is that he knows that the vehicle that he was driving is either not insured or that he has done something to breach a policy condition. What is not known is what he does for a living and the state of his finances. Is he a man of straw, or does he have the resources to pay for the consequences of the collision?
You may wish to pay a private investigator to find out more about him and try to get compensation directly from him, or if you feel up to it - assuming it makes financial sense - place the matter in the hands of an attorney. Your third option would be to call it quits and write off the collision to experience.
Nassim Nicholas Taleb argues in his book The Black Swan that "humans are hardwired to learn specifics when they should be focussed on generalities. We concentrate on things that we already know, and time and time again, fail to take into consideration what we don't know". These words can be applied to the process of buying insurance. Focus should be placed on the highly random event that, in hindsight, makes it appear less improbable and more predictable than it was.
Cedric E. Stephens provides independent 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 Business Editor or contact Mr Stephens directly at firstname.lastname@example.orgSMS/text message to 812-7233.