Cedric Stephens | The unbiblical tendency to cheat at insurance
QUESTION: Do motor insurers penalise policyholders who are caught lying? My car was rear-ended at the gate of my son's school. The other driver blamed me. She said that I reversed into her car. The police were summoned. They concluded that I was not at fault. After conducting a thorough examination of my vehicle, the loss adjusters also agreed. The damage to my car was consistent with my description of the collision. The third-party insurers have, surprisingly, refused to settle my claim. That decision is based on the other driver's report. Can I do anything to ensure that my claim is dealt with fairly and ensure that the other driver does not get away scot free?
- Y.P., Kingston 10.
INSURANCE HELPLINE: Lying is very common. It occurs in all kinds of situations. Making false statements about how motor vehicle accidents happen is par for the course. Persons who go to church every Saturday or Sunday are not excluded. These deceitful practices range from blaming another person for causing a collision to devising schemes to get insurers to pay phoney personal-injury and property-damage claims.
Fraudsters pocket billions of dollars every year from the insurance industry. The cost of their lies and cheating is borne by honest consumers.
Biblical economics (a term Google recognises) writer and consultant Steve Lyston discussed the global shift that is taking place in the banking and insurance industries in an article in this newspaper on July 16. Bankers and insurers were 'legal scammers'. He contrasted their actions with those of the illegal scammers. These are the persons who make an industry out of ripping off gullible North Americans with false stories about lottery winnings.
Mr Lyston's opinions were biased and did not demonstrate that they had benefited from any research. They would have carried far more weight if he had displayed a better understanding of both industries like traditional economists usually do.
Lyston also ignored the impact of fraud. For example, he offered no insights into why - in a supposedly Christian society - some motorists disobey the road code, fail to pay fines for traffic violations, are prone to blaming others for accidents that they caused, submit thousands of claims for non-existent injuries and property damage and believe that cheating insurance companies and utility providers is okay.
Insurers know that lying and cheating are common. Some of their employees, however, behave as though claimants' statements about accidents were delivered on a mountain in tablets of stone even though the facts speak otherwise. They ignore the idea that insurance transactions are not always conducted with a high level of honesty and integrity and that 'anancyism' is part of our cultural tradition.
The other driver is ignorant in addition to being dishonest. She obviously does not know that there is a method accepted by the courts to find out how and why an accident occurred. It is called accident reconstruction.
The process begins with the study of known data such as the post-accident positions of the vehicles, accident-scene evidence and vehicle damage. By working with this data, the reconstructionist can resolve such issues as speed, collision severity, and other causal factors.
An accident reconstruction is the culmination of the scientific data-gathering process formulated into a concise and coherent report that is backed by expert testimony. It is not widely known that some members of the police force have received training in accident reconstruction and that there is at least one private firm that offers these services.
Insurance companies handle scores of claims every day. Their claims staff shares similarities with persons who work in call centres. They are trained to handle claims that are run-of-the-mill. They have little interest in resolving claims like yours.
I recommend that you go further up the food chain to get satisfaction. Contact the claims department head and argue your case.
FINAL WORDS ON FOOTBALL
Benjamin Morris, a writer and researcher about sports and other topics for FiveThirtyEight https://fivethirtyeight.com/ introduced me to the science of analytics in his article "Lionel Messi is Impossible" before the start of the 2014 FIFA World Cup.
"Analytics is a scientific process of discovering and communicating the meaningful patterns that can be found in data. It is concerned with turning raw data into insights for making better decisions," Morris wrote. He used statistical and other data to analyse Messi's performance and compare it against that of other footballers.
Fast-forward 18 months. One local insurer revealed that a UWI graduate with a degree in economics and mathematics had joined its staff as manager of analytics. This information triggered my decision to share in my June 17 article Lloyds of London's prediction about which country would win the 2018 World Cup Competition. The prediction was accurate. It was France.
Insurers, even in Jamaica, are increasingly relying on research and the application of science and technology to solve problems and to make better decisions. Liars and cheaters will also have to up their game if they if they want to stay out of jail or escape other harsh penalties.
- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: email@example.com