Tripling down on tragedy
Published:Sunday | December 2, 2012 | 12:00 AM
Insurance Helpline With Cedric Stephens
My son bought a 2007 Lexus motor car. It was insured comprehensively through a broker for J$7.6 million. My son lived with me until the time of his death in March 2008. In January 2009, I drove the car to Montego Bay to the annual jazz festival. The vehicle was stolen on the last night of the festival. I made a report to the Coral Gardens Police Station the next morning and to the brokers soon afterwards. After six months passed without any action I visited the broker's office where I was interrogated. Suggestions were made that I was involved in the theft. Neither the broker nor the insurer has given me any written information for the long delay or the reasons for the non-payment of the claim. Can you please help me to understand what is going on?
When one bad thing happens, it is called a whammy. When that bad thing is followed by something worse, it is called a double-whammy. Your experience is even rarer: you have suffered a triple-whammy - the death of a child, the theft of his car and then problems with the claim involving that vehicle.
All three matters are connected. You urgently need the advice and guidance of a trusted attorney.
There are at least two sides to every insurance dispute. Because of this, I sought information from the insurers of your son's car. This is what the company's claims manager said.
"The vehicle was insured in the sole name of (the deceased), the proposer who had an insurable interest and who signed the proposal form at inception. The policy was in force for the period February 18, 2008 to February 17, 2009.
"We further confirm that to the best of our knowledge, as there was no information to the contrary, the insurance continued in the name of the said ['X']. Therefore, at the time the vehicle was allegedly stolen, our contractual agreement was with (the deceased) and no other party.
"At his passing, as the contract is of a personal nature and cannot be transferred, insurable interest ceased. Further insurance coverage would only have continued on the operation of law, for example, on (the) transfer of interest by testament. However, this process was not undertaken as documentation had to be produced to satisfy any other insurable interest(s).
"The policy and contractual agreement therefore ceased on the death of the insured. We are, therefore not prepared to entertain the claim under the circumstances but we shall return whatever 'premium' was subsequently paid.
"Further public discussion(s) is not considered appropriate as the matter could be the subject of litigation."
long delay
The insurer's response was written by a lawyer, even though it was signed by the claims manager - who I know is not an attorney.
This, along with the comments in the last paragraph, the long delay plus the estimate of value of the car suggest that the company has adopted a hard-nosed position. The claim will not be paid unless the company is ordered to do so by the courts.
Since this matter is not actually before the courts at this time (or, to use the correct legal phrase, sub judice) I will venture a few comments despite the company's advice that it would be wrong to do so. These remarks will be based on the wording of a typical US motor policy.
John Hungelmann is the author of Insurance for Dummies, 2nd edition, Wiley Publishing, 2001, 2009. He has over 30 years of insurance experience.
In an article dated April 2008, 'Managing Personal Automobile Insurance Risks Following Death', he wrote, "the personal auto policy contains overly restrictive coverage limitations that aren't consistent with what happens in the real world. In practice, when someone dies, it's common for surviving family members to use the deceased's car for personal use until the car is sold as part of the estate resolution. Not only does the deceased's insurer not cover such use, but even the personal auto policies of family members won't either!"
I have not seen your son's policy. Therefore, I cannot say whether it is as "overly restrictive" as a US policy. Hungelmann recommends that on the death of an unmarried owner, the name on the deceased's policy should be changed to the estate of the deceased and the legal personal representative.
I strongly suggest that you retain the services of a lawyer as quickly as possible. This will help you to find a solution. Time is running out. In the event that the matter with the insurance company fails, there may well be grounds for your attorney to sue the broker.
Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Send feedback to aegis@cwjamaica.com or SMS/text message to 812-7233