Question: I have seen in the news recently where the insurance companies and a section of the police force are ganging up against members of the public. They plan to link the insurance of vehicles with the issuing of tickets for traffic violations. Does the JCF have the right to give insurance companies data about an individual which involves the courts, the police and the citizen? This information can be used to punish the individual when the legal system has already enacted punishment in the form of a fine. Won't the insurers gain a financial benefit from the data provided by the police?
Helpline: I typed "traffic violations and insurance" in my search engine. I received 3.69 million results. The articles that I reviewed indicated that motorists in many other countries are penalised by fines and higher insurance premiums when they disobey traffic rules. The traffic-ticketing system that was in place in Jamaica until November last year was, says ex-commissioner of police Rear Admiral Hardley Lewin, "flawed, with corrupt police being able to manipulate it and motorists able to escape scrutiny despite having numerous outstanding tickets" — www.jamaicanpolice.com.
This newspaper published an item on February 10, 2011 which provided evidence about the scale of the problem. The Government was owed over J$3 billion in uncollected fines over an "extended period."
uncommon to share
It is not uncommon for governments to share information with insurers about persons who violate traffic rules. This is only natural. Motor insurance is compulsory. The compensation system for motor-vehicle accidents, insurance, is founded upon the licensing of drivers and vehicles by the state and the enforcement of traffic rules by the police and the courts.
Each part of the total system needs the other to operate effectively. Insurers routinely share information with authorities about the vehicles that are insured.
The new ticketing process is expected to crack down on persons who accumulate demerit points for driving offences and lose their driving permits as well as those who do not pay their fines. It was designed this way. There is nothing bad about sharing this type of information with motor insurers.
Some motorists here have been "beating" the system here for many years. Contrast this with what has been happening in California, according to The Daily Breeze. It published an article about a man who was issued a US$35 ticket for failing to come to a complete stop. That amount "became a US$234 ticket after added penalties." State legislators have been adding new penalties, such as a "state conviction fee," since 2009, thanks to a US$10-billion budget deficit.
Most reasonable persons agree that drivers who break traffic rules are more likely to become involved in accidents. Insurers share this view. Is it fair for the rule breakers - mainly young men - to pay the same amount in premiums as persons who drive by the rules and have fewer accidents? Is this what you are suggesting?
traffic school
The cost of disobeying a traffic rule should not end with the payment of a fine. In some places, the violator is also required to attend a traffic school at his own expense if he/she wishes to avoid an increase in his/her insurance cost.
Traffic violations can raise premiums by as much as 50 per cent. An analysis of more than 32,000 insurance policies that was carried out in the US found that drivers who purchased a one-car, single-driver policy in 2010 and had one violation on their record paid about 18 per cent more on average than drivers without any violation. Drivers with two violations paid 34 per cent more. Persons with three violations paid a staggering 53 per cent more, according to my source. Data for the local market was not available.
All violations are not equal. One ticket for speeding may not raise any eyebrows. Two or three in quick succession could cause you to get dropped. More serious offences, like driving while intoxicated or a manslaughter conviction, could have a similar effect. The impact that violations have on insurance premiums is likely to vary among insurers.
I discussed your question with Insurance Association Jamaica head Paul Lalor. His views converge with mine. "Safe drivers," he says, "deserve to be rewarded and ... the best way to do that is to charge higher premiums to persons who are habitual speeders and who pose a greater risk to life and limb."
I hope that the facts that I have shared with you have proven that the initiative to allow insurers to have access to information about traffic violators is not unusual. It should not be viewed as bad. If it helps to reduce the carnage on our roads and results in those posing more risks to pay more in premiums, then the society as a whole will benefit.
Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. aegis@cwjamaica.com, SMS/text message to 812-7233.
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