Cedric Stephens | Lessons for insurers from government response to COVID
QUESTION: One of my vehicles was recently involved in an accident. It crashed into a light pole. Three employees were on board - the driver and two assistants. Two of them suffered broken legs and the third was badly shaken up. I suspect that he suffered internal injuries because of complaints about lingering pain and dizziness. The vehicle is insured under a comprehensive policy. The employees are expected to remain off the job for weeks. What and how much compensation will the insurance provide? Is there anything that I should or shouldn’t do?
– A.D., Kingston
INSURANCE HELPLINE: I plan to answer your questions in the context of what is happening locally in relation to the Government’s management of the unprecedented health crisis, COVID-19, and the February 2019 market-conduct guidelines for the insurance industry from the Financial Services Commission (FSC).
It is still too early to assess the efficacy of our Government’s strategies to lessen the effects of the novel coronavirus. However, the actions that have taken place so far have received praise from the World Health Organization and The Miami Herald. Insurers can learn important lessons from studying what the Government has done.
The Miami Herald describes Jamaica’s actions as being among those of a “small hemispheric club … that responded to the crisis with forceful measures that seemed excessive just days ago but now seem prescient”. Or, to use a more culturally appropriate word: prophetic.
The Government of Jamaica’s execution of its crisis management and communication plans on COVID-19, particularly the latter, would not receive an ‘A’ from Professor Carolyn Cooper because of its failure to use the local idiom in messaging. The Government cannot be faulted otherwise for dispensing useful information via different kinds of media on a timely and regular basis.
Same cannot be said about the information that your insurer has offered about the routine motor claim that you reported.
It is very sad that 12 months after the regulator revised its market-conduct guidelines that had as one of its goals the development of “policies and processes to handle claims in a timely and fair manner”, that you have no idea if and how your insurer will respond.
Your insurer’s management, it appears, still does not understand the intent and purpose of the FSC’s directions.
Spirit of good service
GraceKennedy’s CEO Don Wehby, on the other hand, does. “Customer centricity and improved business processes for greater efficiency,” are critical success factors in the insurance business, he says.
Dispensing relevant, value-added information and advice to policyholders at the first notice of a claim and afterwards on a timely basis are preferable in most instances to doing nothing but waiting for the claim to proceed through its development cycle. This is precisely what is implied in Mr Wehby’s comments.
Below is a sample of some of the things that the claims official should have discussed with you when you filed the claim in order to comply with the letter and spirit of the FSC’s rules and claims best practices:
• The names and contact details of the officials who would be handling the claim;
• The nature of your duties under the contract of insurance;
• The extent to which you will receive indemnity under the policy if claims for negligence were to be made against you and/or the driver for the injuries that your employees suffered while they were being carried as passengers;
• Clear, unambiguous, and written information why the insurer decided not to honour your claim if this course of action became necessary;
• The maximum amounts that the policy would pay if a claim was made against you as the owner and/or driver for negligence was successful;
• What you should do if you were to receive a writ of summons from attorneys representing the injured employees;
• The insurer’s process for the handling of personal-injury claims;
• The process for making a claim for repairing the damage to your vehicle and an approximation of how long settlement would take;
• The impact that the payment of any damage or personal injury claims would have on the vehicle’s no-claims discount and premiums in future;
• How complaints in relation to the claim would be handled;
• The names and contact details of the officials who would be handling complaints;
• The methods by which the company would communicate with you over the life of the claims;
• The methods by which disputes between you and the company would be adjudicated; and
• What would happen in the event that you supplied false information.
Motor policies have limits. If you were to read your contract, you would find that if claims for liability for personal injuries were to exceed a certain amount, the policy would pay that limit and that you would be on the hook for the balance. The limit varies between insurers. I hope that I have offered you an outline of some of the things that you should raise with your insurer or broker if you want to have peace of mind about the claim.
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