Insurance broker, Raj Singh
The insurance sector is upping pressure for raising the limits of third party coverage, in light of a number of deadly road accidents involving public transportation.
Under current third party coverage, passengers of minibuses injured, can only receive a paltry $20,000-$25,000 each.
This is clearly not enough, says Raj Singh, Chief Executive Officer of Raj Singh Insurance Brokers.
Singh would be joining calls by Bish Panday, another broker who just over a month ago highlighted concerns over the situation.
In a letter to the editor recently, Singh said that the very low mandatory third party limits of liability currently existing under the Road Traffic Act has been the most ignored crisis in society for decades, and needs to be prioritized and placed on the front burner.
He pointed to calls by Panday who also urged the authorities to address the issue.
“This problem is further exacerbated by the fact that most of our public transportation vehicles, i.e. taxis, hire cars and minibuses; carry these inadequate limits of liability under their motor policies which offer little or no protection for pedestrians, passengers, the drivers themselves and the public at large.”
It is no coincidence that most of the accidents that occur on roadways involve public service vehicles, the executive noted. “Every year, hundreds of lives are lost due to road accidents, many more persons suffer serious injuries and many families grieve and suffer grave economic hardships after losing their loved ones from these accidents. Not to mention, the untold damage to property and consequential losses that are prevalent in these accidents which were not adequately catered for by the insurance protection of such insured.”
The last time that any significant moves were made to adjust the laws were in the 90s, when the late Speaker, Derek Jagan SC, presided over a bill introduced in Parliament aimed at addressing the inadequacy. However, they were objection that operators of taxis, minibuses and hire cars would not be able to afford the increase in the premiums.
“Ever since that Bill died a natural death, no other Minister of Government has since seen it fit to engage the insurance and transportation industries, meaningfully, in an effort to resolve this critical situation,” Singh explained in his letter.
A few years ago, a number of local insurers sought to address the matter, offering uninsured and underinsured motorists cover. “This optional coverage has provided some measure of relief and can be purchased by an insured person under his policy to cushion the potential disastrous effects on our roadways from those deficient motorists who do not carry any insurance or very inadequate limits of liability under their policies.”
Basically, the insurance official said, those owners of these public transportation vehicles are buying liability coverage twice for the protection of their assets and liabilities. “Surely, that is not fair to those insured. There is a dire need for our lawmakers to address this burning issue. The mandatory third party limits of liability for bodily injury and property damage need to be immediately increased to more realistic figures.”
Meanwhile, Singh also pointed to other areas of concerns. One of these includes the slothfulness experienced in the judicial system which creates a situation where most aggrieved parties refrain from contesting their grievances against delinquent parties.
“When persons learn that it would take 4 or 5 years before their matter is even called up for hearing and another few years before it is completed, a speedy out-of-court settlement or a reduced settlement from the insurer is usually the best course of action.”
Singh noted that both the Acting Chancellor and the Attorney General had acknowledged the sloth, and had signaled intentions to hire more judges and implement reforms.
Last month, Panday had noted that the current coverage was more applicable to the 70′s. “Back in the ’70s, if someone got into an accident, they could have received up to $20,000. That amount back then had the value of what was like US$20,000 ($4M). We can’t have people receiving $20,000 now.”
Currently a $5,000 (premium after no claim discounts) third party insurance for a normal car will only see coverage up to $300,000. This means if a vehicle has such insurance, and the driver knocks down a pedestrian, that pedestrian can only receive up to $300,000. The same goes for a vehicle that is damaged by the insured car in an accident.
However, the owner of a motor vehicle can opt for even lower limits of coverage (and still be compliant with the law) that could cost him $1,000 to $2,000 (after discounts) annually and see a mere $20,000 coverage.
In other words, Panday said, the law makes it mandatory for an insurance policy to be taken out for vehicles, but the limit does not have to be more than $20,000.
Of course, vehicle owners have been going higher, knowing full well of the dangers of having very low limits.
“Imagine ending up in an accident costing $600,000 to repair the other person’s vehicle. Your coverage is only $300,000. That means you are in the hole for $300,000.”
There have been several deadly accidents involving especially minibuses around the country. Many victims have walked away with virtually nothing.
Source: http://www.kaieteurnewsonline.com/2013/10/24/growing-calls-for-third-party-insurance-limits-to-be-raised/
