Question: My vehicles were involved in three accidents. The third parties were at fault in all cases and they accepted liability. However, my insurance company is telling me that I will not be compensated. The third parties have breached their policies. I will have to sue them to get redress. Could this be really so? My insurer settles accidents in which my vehicles are at fault almost immediately. I feel that I am being treated unfairly. Can you explain what is happening?

- dferron_boothe@hotmail.com.

Answer: Your email lacks important details. For example, were the third parties insured with the same or different insurers? Was your insurer one of those companies? What did the third-party owners and/or drivers do to breach their contracts? There could be many good reasons why the third parties' insurers decided not to pay you.

Your three accidents with persons who purportedly breached the terms of their policies could be plain bad luck. Your experience could also point to dysfunction in the insurance system, or a mix of the two. In the absence of more information, I will have to generalise in replying to your questions.

Market conduct is one of the tools that regulators use. It refers to the nuts and bolts of how business is done. Things like how policies are sold, the language used in contracts, how claims are handled, how quickly they are settled, and other bread-and-butter matters that affect consumers directly, are included in the phrase.

Highfalutin issues, like solvency, governance and steps to encourage financial literacy are also part of the regulatory toolbox. It is a shame that you do not have clear reasons or understand why the third-party insurers refused to pay, even though the three drivers admitted that they were at fault.

Your case reflects poorly on the industry and does nothing to build confidence. Financial literacy is laudable. In my opinion, however, it should not be implemented at the expense of market-conduct regulation. Bank of Jamaica and Financial Services Commission heads, pay attention!

WHY INSURERS REFUSE TO PAY

There are many reasons why insurers refuse to pay claims. The causes for non-payment are to be found in the fine print of insurance contracts. Since contracts vary between companies, the reasons for non-payment are sometimes very different. The items listed below are some of the common things that insurers say give them the right not to pay:

1. The licence of the person driving was invalid (bogus) or inappropriate.

2. The driver was unlicensed.

3. The age of the person driving was below the minimum age stated.

4. The vehicle was being used for a purpose other than that allowed by the contract.

5. The person driving at the time of the accident did not fall within the group of persons who were authorised to operate the vehicle.

6. Statements made in the application for insurance were discovered to be false when the accident was reported.

This list is not exhaustive. There could still be other reasons why the three insurers may have decided to exercise their legal rights not to pay. What would make me very uncomfortable and suspicious is if the reasons for non-payment were not clearly stated or cannot be independently checked.

Make a visit to your insurers. Ask them to show you their files on the accidents. Examine the letters from the third-party insurers very carefully to get answers to the questions I have posed and to understand the reasons given for non-payment. Check to see if those reasons are similar to any of those I have listed. At the end of this exercise, you should have a much better idea whether you were being treated unfairly by the three insurers or you were having a share of bad luck. If it is the former, I would suggest that you write to your MP. In the event that your insurers refuse to cooperate, ask to speak with the top boss. Put your case directly to him.

Obtaining legal redress takes effort, time and money. May I suggest that you speak with a senior official at your insurer to find out what is likely to be involved and what are the prospects for recovery before you commit to this course of action. Good luck!

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