You say motor policy breach, FSC says show the evidence!

Insurance Helpline with Cedric Stephens

Question: I have owned a 2000 Toyota Corolla station wagon for the last four years. I use it in connection with my business. Three companies have insured it for short periods of time. All have subsequently cancelled the insurance. They say this is because I am using the vehicle as a 'robot' taxi. I am the sole driver and do not use it in the way they say. Is there anything that you can do to help me?

- M.R., Seaforth, St Thomas.

Answer: March 15 was World Consumer Rights Day. So said a full-page advertisement published in this newspaper. It was put out by the Consumer Affairs Commission (CAC). The day's theme was Our Money, Our Rights'.

I suppose this means that when we as consumers are spending our money, we have certain rights.

The treatment that was meted out to you by three motor insurers leads me to conclude otherwise. Because they believe you are a robot-taxi operator, a claim you have denied, it seems that you are not entitled to the same privileges as other consumers. You cannot buy motor insurance.

The insurers' argument, taken to its logical conclusion, means one of two things. You should sell the car and find alternative employment or, break the law and drive without insurance!

I sought the help of Orville Johnson. He is the general manager of the lobby group, Insurance Association of Jamaica. Below is a summary of the email I sent him:

" ... A resident of St Thomas has contacted me about his inability to obtain motor insurance for his vehicle, a 2000 Toyota Corolla station wagon. Over the last four years, Companies A, B and K have provided coverage for short periods of time but have all subsequently terminated the insurance because the vehicle is purportedly being used as a 'robot' taxi.

"M.R. has vehemently denied that the vehicle - which he alone drives - is being used in that way. If what he says is true, the actions of these insurers have made him uninsurable from the perspective of the other companies in the insurance market. As you are no doubt aware, as a proposer for insurance, he is under an obligation to disclose the actions taken by the companies that he approached in the past to prospective insurers. It appears that he has been effectively black-balled."

Mr Johnson's response was short and to the point.

" ... We have determined through the industry's independent initiative that the complainant was operating the vehicle as an illegal taxi."

Karl Samuda, the minister with portfolio responsibility for the CAC, in a message marking Consumer Rights Day, spoke about "the myriad of financial issues facing ... consumers at this time," in addition to what he called "injustices."

Frankly, I believe that the three insurance companies and the IAJ have done you an injustice. They have not disclosed their source of information.

You should have been given the opportunity to challenge its accuracy. Even convicted criminals have these basic rights in our justice system.

I sent a copy of the email that I wrote to Mr Johnson to the Financial Services Commission (FSC), the government body that regulates the insurance industry.

Leon Anderson, the senior director for the insurance division, said that you should "send a written complaint to the FSC on the matter ... give as many details as possible. The letter or email should be addressed to him or Miss Janice Holness, senior director, investigation and enforcement."

He also stated that the companies would be asked to "produce the evidence in their possession that supports the allegation that you operate the vehicle as a robot taxi".

I do not have the muscle to solve your problem. I recommend, therefore, that you follow the advice of Mr Anderson and exercise your rights as a consumer.

How did you describe your trade or occupation in the form you filled out in applying for insurance? If you used the term 'businessman', this would be like waving a red flag in front of a bull.

Insurers hate this term.

Could this be part of the problem?

Concluding Comments:

1. Minister Samuda identified injustices "such as unfair contract terms, excessive charges from small-loan operators, technical language and financial jargon in documents presented to consumers".

Issues like these are discussed from time to time in this column. When is he going to develop the strategies for solving these problems instead of just talking about them?

2. Jamaica has, according to reliable sources, one of the highest mobile-phone penetration rates in the world. Why, therefore, is the FSC not allowing consumers to file complaints using text messages, in addition to the other methods?

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Email: aegis@cwjamaica.com or send text (SMS) message to 812-7233.