Cedric Stephens | Watch the clock on stretched-out claims

QUESTION: On January 5, 2016, I was driving in Montego Bay along Leader Avenue from the Cornwall College end. I stopped at the Leader Avenue-Peace View-Mango Walk intersection. I signalled that I was planning to turn right on to Peace View Avenue. I turned right when it was safe to move. When I was in the middle of the junction I saw a van approaching from my left on Mango Walk. The driver ignored the stop sign. As a result, his vehicle collided into the left front fender and bumper of my Toyota Axio. The pre-accident value of my car - which was insured under Third Party Policy - was $1.5 million. I sold the wreckage for $500,000. The other driver filed a report with his employer's insurers several weeks later. In September 2016 they wrote that they were "having discussions with their client and will revert as soon as the matter is finalised". Nothing has happened in nearly two years. Can you help?

lexusantonio@yahoo.com

INSURANCE HELPLINE: The government-designed and supervised compensation system that is run by motor insurers has failed you. It has not put the money you lost because of the collision back into your pocket after 30 months. This is a big disgrace.

In the meantime, the exchange rate has moved from J$120.46 to the US$1 to J$131.01, a decline of 8.75 per cent. This means that if your claim was settled during this month for $1 million, that amount would be worth nearly nine per cent less in US dollars than if it had been paid in January 2016.

Local courts recognise the time value of money. Most persons on the streets - including elected representatives - do not. I have been reading the MPs' contributions to the sectoral debates in Parliament for many years. I am yet to see any calls for improvements in the system.

I smelled a rat as I read the statement that the other driver made to his employer's insurer. Important details - except the speed at which the vehicle was moving - were absent.

Incorrect description

He referred to Peace View as Meadows Avenue, omitted to state whether he was turning left or right, if there were traffic signs, whether he slowed down as he approached the intersection, came to a stop where the roads meet, or if he took any evasive actions to avoid the collision. He also incorrectly described your vehicle as a Toyota Corolla.

In contrast, you paid attention to details. Your statement was witnessed and dated; his was not. Alterations were initialled. I sensed that you tried very hard to create an accurate word picture of the events that occurred immediately before and after the vehicles collided.

The other thing in your favour is that you appear to be a resident of Montego Bay. The other driver's given address is Kingston. From my experience, driving in the 'Second City' can be very challenging at the best of times. Based on all these things, if you were both placed on the witness stand and delivered the written statements by word of mouth, I would be more inclined to believe your version of what took place than the other driver's.

Claims officials develop instincts that tell them when drivers are lying. I believe that person who was handling your claim at the third-party insurer suspects that the other driver was being untruthful about exactly what happened.

The "having discussions with their client" is a polite way of saying so and an excuse to delay payment. Since you have a third-party policy, your insurer has "no skin in the game". You are on your own. If you are not very careful, your claim could become statute-barred by January 2019. This means that your legal right to make a claim in the courts could expire in six months' time.

Even though I do not have a copy of the policy that protects the other driver, I am 99.99 per cent certain about the nature of the protection the policy affords and what the insurer can do under the contract to settle claims like yours.

One section reads: "We will indemnify you subject to the Limits of Liability ... against liability at law for damages and claimant's costs and expenses and all costs and expenses incurred with our written consent in respect of a) Death of or bodily injury to any person; b) Damage to property in respect of any one accident or number of accidents arising from one occurrence where such death, injury or damage arises out of an accident caused by or in connection with the insured vehicle."

Your claim falls under (b).

This is what the policy says about the settlement of claims: "We can: take over and conduct the defence or settlement of any claim; and take proceedings at our own expense and for our own benefit to recover any payment we have made under this policy. We will take this action in your name or in the name of anyone else insured by this policy. You, or the person whose name we use must cooperate with us on any matter affecting this insurance, including any legal proceedings."

This means that the insurer exercises exclusive rights over the negotiation and settlement of the claim. They are in control of the chequebook.

- 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