Cedric Stephens | Personal injury and consumer vulnerability

QUESTION: A young man failed to stop at an intersection in 2009 and ran into my car. My vehicle overturned and was totalled. The other driver's insurers offered to settle the policy maximum, which is $2 million. After nearly 10 years, getting doctors' reports some costing over $100,000 almost losing my home due to my inability to work and without funds to pay my mortgage, medication that costs about $30,000 per month on average, and the loss of my tools of trade, I would like to know if the offer is reasonable.

I have never been in a position like this before. Since medication is so costly, I take it only when the pain becomes unbearable. This claim was negotiated through my insurer. Are they really looking out for me? Should the young man have been sued, or have they waited for the last minute when the statute of limitation is about to run out? Should I seek alternative legal advice?

- jetito1980@yahoo.ca

INSURANCE HELPLINE: Your email freaked me out. It fell into a deep crevasse in my inbox. The mail was there for over 30 days before I saw it. I felt awful when I read what you had been through following the accident eight years ago. Please accept my apologies.

Initially, I believed that I was unqualified to answer your questions. Personal-injury claims are best handled by lawyers which I am not. The second reason was that the country code in your email address suggests that you live in Canada. I know nothing about the compensation system in that country.

Things changed when you said the accident occurred in Jamaica. I have since repeated my earlier advice. Don't sign anything from the third-party insurer without first seeking the advice of an attorney.

This article is to provide you with information to speak intelligently with the lawyer. It should prevent him or her from leading you in the wrong direction.

Negotiate at the start of the engagement the cost of the attorney's services. Determine whether those services will be billed at $X per hour or as a fixed amount based on an upfront deposit of $X or represent X per cent of the total amount that is finally paid by the insurance company.

It is your job to decide which option is best for you. The attorney should be able to tell you whether the maximum amount that is payable under the third party's policy will include his or her legal fees or will come out of the settlement from the insurance company. Bear in mind also that eight years on, the lawyer may not have a great deal of work to do. An offer of settlement is already on the table.

MAXIMUM AMOUNT PAYABLE

Is $2 million the maximum that the third-party insurer is required to pay for the personal injury, including pain and suffering, plus the costs and expenses and the loss of income that you suffered under terms of its policy? I cannot answer this question. I don't have access to the contract. I can, however, tell you by looking at the Motor Vehicles Insurance (Third-Party-Risks) Act, MVITPRA, the minimum amounts that this law requires.

Section 5(1) says: "In order to comply with the requirements of this act, the policy of insurance must be a policy which (a) is issued by a person who is an insurer; and (b) subject to the provisions of this section, insures such person, persons, or classes of persons, as may be specified in the policy, against any liability incurred by him or them in respect of: (i) the death of, or bodily injury to, any person; and (ii) any damage to property, caused by or arising out of the use of the motor vehicle on the road."

Subsection (2) says in relation to claims for death or bodily injury claims that "the policy shall be required to cover (a) subject to paragraph (b), liability to any one person for a sum of not less than one million dollars; and (b) a total liability of not less than three million dollars, in relation to each motor vehicle insured under the policy, arising out of all such claims ... in connection with any one accident."

The limits for property damage claims specified in Subsection (3). It reads: "(a) subject to paragraph (b), liability to any one person for a sum of not less than five hundred thousand dollars; and (b) a total liability of not less than one million dollars, in relation to each motor vehicle insured under the policy, arising out of all such claims ... in connection with any one accident."

Many motor policies offer limits that are higher than those required by law.

Is the third-party insurer's offer of settlement the maximum amount payable? I do not know. This is precisely why an attorney is necessary. His or her job will be to ensure that your interests are protected and that the insurer does not take advantage of you.

Your questions led me to the fascinating subject of consumer vulnerability. The term appears in a 2015 paper by the United Kingdom's Financial Conduct Authority. It argues that "consumers in vulnerable circumstances may be significantly less able to represent their own interests, and more likely to suffer harm than the average consumer (and) that regulators and firms need to ensure these consumers are adequately protected".

Happily, the worst appears to be over. You no longer appear vulnerable.

On the other hand, there are thousands of persons in this society who find themselves in this group. Sadly, both the phrase and a strategy for dealing with them are absent from the plans of local financial service providers like banks and insurance companies.

- 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