Misusing a Latin phrase to reject a claim
... And almost getting away with it
QUESTION: I have incurred losses amounting to over $1 million, excluding interest, since my car was written off in an accident that occurred on the Old Harbour Road, St Catherine, last year. On September 5, at about 9:15 p.m., I was driving my blue Toyota Corolla home towards Old Harbour from Spanish Town. On approaching the entrance to Heartlands Road, another car drove out in the direction of Spanish Town. I call it Car 1. There were two vehicles coming from Old Harbour, Car 2 and Car 3, immediately behind Car 1.
Due to the speed at which Car 2 was travelling, the driver had to take the sidewalk (undertake) to get around Car 1. On seeing what had transpired, the driver of Car 3 braked as a result of which his car got out of control. It ended up on my side of the road and hit my vehicle, totalling it. I had a third party policy so I had to claim on the other party's insurance. Cars 1 and 3 were insured with the same company. According to company officials, there was not sufficient evidence to place the driver of Car 1 at the scene of the accident. Also, the driver of Car 3 could not be held liable because of "proximate cause". Do I have any recourse?
- BLD, Old Harbour PO, St Catherine
HELPLINE: I read a report last week about a small insurance company in California. In settling a claim filed against one its employees by an elderly man, the company delivered the compensation, US$21,000 ($2.35 million in local currency) "in buckets full of coins".
Eight company employees arrived in a van at the claimant's attorney office and "proceeded to deliver five-gallon bucket after five-gallon bucket filled with change before leaving". California, by the way, has the most activist, pro-consumer set of insurance regulations in the US.
Your case takes the cake, however. The elderly man got paid. You, on the other hand, have had to sit around for almost one year listening to twaddle - with no money in your hands. Our regulator, the Financial Services Commission, on the other hand, which can hardly be described as pro-consumer, allows insurers to let employees who do not grasp the most basic principles of insurance law to talk rubbish and rob innocent accident victims like you of the compensation to which they are legally entitled.
Proximate cause has two definitions. says the International Risk Management Institute of Dallas, Texas. The first is "the cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (that is, concurrently) to produce a loss". This meaning obviously does not apply to your claim.
The second one, however, can be applied in your claim against the drivers of Cars 1 and 3. Proximate cause "refers to a doctrine by which a plaintiff (you) must prove that the defendant's actions (the two third parties) set in motion a relatively short chain of events that could have reasonably been anticipated to lead to the plaintiff's (your) damages. If the defendant's actions were 'proximate' or close enough in the chain of causation to have foreseeably led to the plaintiff's damages, courts will impose liability. Otherwise, if the defendant's actions set in motion a long, bizarre chain of events that could not have reasonably been foreseen to lead to the plaintiff's damages, courts will not impose liability.
The second edition of The Dictionary of
Insurance, published by Prentice Hall, defines proximate cause as "the dominant cause, not the remote cause. The insurer will be liable if the sequence between the insured peril and the loss is unbroken".
The third edition of Barron's Law Dictionary explains the Latin phrase, causa proxima, as meaning, "that which is sufficiently related to the result as to justify imposing liability on the actor who produces the cause".
The person who was at the wheel of Car 3 was driving at an excessive speed, like the driver of Car 2.
Because of this, it appears that he did not have sufficient time or space in which to safely bring his vehicle to a stop and avoid hitting Car 1. He therefore slammed on the brakes, the four wheels of the car locked and, as result, he lost control, as his vehicle slid into the path of yours.
The proximate cause of the collision was the careless manner in which Mr Reid was driving his car. The police report confirms this.
'How stuff works?' - http://auto.howstuffworks.com/auto-parts/brakes/brake-problems/brakes-lo... - provides information about what normally happens when brakes are applied at high speeds in vehicles without ABS (or anti-lock) brakes.
Section 5 of The Motor Vehicles Insurance (Third-Party) Risks Act makes it crystal clear that a policy of insurance must "insure such person, persons or classes of persons, as may be specified in the policy, against any liability incurred by him or them in respect of: (i) the death of, or bodily injury to, any person; and (ii) any damage to property, caused by or arising out of the use of the motor vehicle on the road".
There is absolutely nothing in that law that gives an insurance company the right to not to pay a claim due to the doctrine of proximate cause. The words, "caused by or arising out of the use of the motor vehicle on the road", it could be argued, is implicitly referring to the doctrine of proximate cause in the context of a motor vehicle accident.
Further, if the motor policy of the insurance company was to be examined, no exclusion clause relating to proximate cause would be found.
Go to the top of the food chain. Obtain the email address of the company's CEO. Send him an email outlining your case and demanding quick action. Since your claim has remained unpaid for such a long time for incorrect reasons, do not forget to include a provision for interest in calculating your claim.
Given the deplorable way in which your claim was handled for nearly 12 months, I studied Section 139 of the 1,036-page insurance regulations - payment of claims, refusal to pay - to see if it listed any penalties or fines that could be imposed on the insurance company for the mishandling of your claim.
That exercise was a complete waste of time. The rules could well have been written in Latin! I did not understand them.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: firstname.lastname@example.org