Insurance Helpline | Is the extra income worth the risk?

Question: Would my motor vehicle insurance be affected if I were to carry more than the permitted number of passengers in my Toyota Hiace 15-seater minibus? It is licensed as a public-passenger vehicle.

- T.P., Kingston 5

INSURANCE HELPLINE: One meaning of tunnel vision is: 'The tendency to focus exclusively on a single or limited objective or (point of) view'. You do not suffer from this condition. This is both in the medical and informal meanings of the phrase.

Many discussions about insurance are affected by the inability of consumers (and insurers, too) to see things that are not close to the centre of their field of vision.

Safety regulations - for example, the wearing of seat belts - how motor vehicles behave while they are in motion and vehicle design are some of the things that come into play and that impact the question you asked. Earnings are also affected. This is probably why the transport minister recently said he "will be moving an amendment to a bill which will recognise that the appropriate number or maximum number (of passengers) in a taxi is five - the driver plus four".

The driving conditions in New Zealand, like Jamaica, are very difficult. That country "has more bridges, corners and hills per 100 kilometres of road, and fewer divided highways, than most other developed countries". Its transportation agency published what is, in my opinion, an excellent 15-page leaflet: An Introduction to Heavy Rigid Vehicle Stability and Dynamics. Parts of it should be adapted for local use and included in the syllabus for persons seeking permits to drive public-passenger vehicles and heavy trucks.

In discussing vehicle dynamics - defined as "motion of a motor vehicle and the various forces that act upon the vehicle when it is in motion" - it says: "An often overlooked aspect of the dynamics of motor vehicles is that in the majority of situations, a vehicle has to be moving before the forces acting on it affect its performance. Thus, (with only a few minor exceptions) a person - the driver - must make the vehicle move. It follows then that if the person in control of the vehicle is making it move, then this person should have total control over whether the dynamics of the vehicle will be a contributing factor in any crash". Many of our drivers would disagree with this basic rule.

About one-third of the booklet discusses the impact of the load that is being carried, on the stability of a vehicle. Some of those principles can also be applied to passenger-carrying vehicles. The leaflet ends by saying: "It is a driver's responsibility to understand how the dynamics of a vehicle affect the way the vehicle handles on the road. Drivers need to:

n acquire a basic understanding of vehicle dynamics;

n apply the correct driving techniques to manage the numerous forces at work;

n ensure their vehicle speed reflects the driving conditions;

n consider the effects of loads and the ever-changing road conditions; and

n familiarise themselves with the effects of speed, weight and cornering."

You must decide whether it makes sense, from the point of view of safety, to load your vehicle with passengers in excess of the manufacturer's recommended limit in order to earn additional income.

Here are my responses to the question you asked:

1. There are, generally, no specific provisions in motor policies that allow insurers to invalidate coverage to passengers in the event that the actual number of passengers exceeds the manufacturer's limit or those set by the regulatory authorities.

2. Subsection 2 of Section 8 of The Motor Vehicles Insurance (Third-Party Risks) Act prevents insurers from restricting "the insurance" in a number of situations, including those relating to "the number of persons that the vehicle carries".

3. The escape clause referred to in item 2 - that effectively allows the carriage of passengers in excess of the recommended limit - is of little practical effect from the point of view of the motorist, if the passengers were to be injured in a collision. This is because the Act sets compensation limits for any one person and any one motor vehicle. The latter is $3 million, while the former is $1 million. The more passengers that are being carried at any one time, the less insurance funds there will be to compensate them individually in the event of multiple injuries.

4. Claims for personal injury in excess of $1 million for any one person are not infrequent.

5. The motorist/driver is on the hook after the insurer has discharged its policy obligations under the act. Injured passengers often seek redress directly from the motorist/driver where the amount of his/her claim exceeds the limits that are in the act.

Buy higher any-one-person/any-one-event limits for personal injury instead of seeking to earn more money to carry passengers in excess of the manufacturer's limits.

n Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to aegis@flowja.com.