IN THE PUBLIC INTEREST: Licensed to cry over insurance

DO YOU DRIVE? Do you walk the road? Do you have family members who use our roads? Do you occasionally allow friends to use your vehicle? If the answer to any of these questions is yes, then this column is definitely

I have known for a long time that we have a lot of “illegal” drivers and vehicles on our roads, but it has only been in the last two weeks or so that I can say I have obtained a reasonable appreciation of the extent of the problem.

Let me explain using the story of Angela Bascombe. On December 10, 2014 her vehicle, fully licensed, insured and being operated by an authorised driver with a valid driving licence, was written off by a truck exiting from a side road on to Westbury Road.

Her 1999 Mitsubishi Lancer was insured third party with the Insurance Corporation of Barbados Limited, while the truck, owned by a Mr Kissoon of Dash Valley, St George and driven by someone who identified himself as Wallace Brathwaite of Monroe Village in the same district, was insured by Massy United Insurance.

Proof

A year and a half later, Bascombe is still unsure if the insurance company and police have ever received proof from the driver of the truck that he had a valid driving licence at the time, something the law requires persons to do within 48 hours. So in the meanwhile, Bascombe is headed up the proverbial creek without a paddle, having been warned by the insurer that should the driver turn out not to have had a valid licence, they will not honour any claim.

In fact, having been advised by her insurance company to “take care” of the vehicle herself until the matter can be settled, she has had to pay $176 for a pre-accident valuation, and a further $235 to Jones Garage for the wrecker that took the remains of her car from her home to Simpson Motors for the assessment and then back. Subsequently it was auctioned for $2 075.

Yesterday an ICBL official explained that since Bascombe had third party insurance they can offer her no compensation unless Massy United says it is accepting liability. Their last communication from Massy, he said, was that they had requested and were awaiting a police report on the accident.

Differing opinions

Bascombe called me because of my last column in which two insurance industry officials offered differing opinions on how insurers were required to act in cases where a vehicle causing damage in an accident is covered by insurance, but the driver does not hold a valid licence.

And here’s my primary reason for returning to the subject this week: It appears that the position that insurers are not obligated to cover costs when their client has up-to-date insurance but no valid driver’s licence is in fact the correct interpretation.

Here’s the official legal opinion I received from our attorney:

“I have carefully reread the article you wrote last week and I have also reread the emails sent to me by you.

“In a sentence, it seems that Anton Lovell (of Cooperators General Insurance) is right and your veteran insurance man is wrong on his second point, which is that the insurance company must pay and recover if a licence is not valid only because it has expired.

“Both you and Lovell are on the same page when he speaks about insurance companies not being liable if somebody has not renewed his licence. You answered the lady correctly, and you focused on the right issue – complying with contractual conditions to which the owner/driver agreed.

“The issue on to which Mr Lovell latched relates to the statement by the insurance veteran, who spoke of a practice which allowed the non-renewing driver to have his claim honoured if he had not renewed his driver’s licence. The insurance company in such an instance would not be insisting on its full legal rights, but it can.

Valid licence

“Obviously, the insurance company would certainly have stipulated that the driver (whoever he is) should be operating under a valid driver’s licence when he is driving the car. If the operator of the vehicle does not have a valid licence, then he has a problem because the possession of a valid driving licence is not one of the matters mentioned in Section 48 of the Road Traffic Act Cap 295.

“That section mentions certain matters which the company cannot use against the owner to avoid paying on the policy. Specifically what Mr Lovell is speaking about and objects to, is the statement by your veteran that: ‘He explained, however, that because of the provisions of the Road Traffic Act where a client with an expired licence was at fault and a claim made, the insurance company would still be required to settle with third parties for losses or injuries, but the actual owner of the vehicle, the insured party, would end up receiving no compensation and possibly being sued to recover any payments the insurer made’.

“A motor policy is founded on a contract, which contains certain terms to which both parties have agreed. If the possession of a valid licence is a condition of the policy, then the insurer is at liberty to avoid the policy if news comes to its knowledge that, at the time of the accident, the owner was driving with an expired licence. An expired licence is not valid….

“The fact that it was expired by one day does not matter; what we are looking at here are the rights of the insurance company. If for good business reasons the company does nor enforce their right, then that is a different matter. But good business practice and good public relations are not the same thing as the observance of the letter of the law. You mention something about the spirit of the law. It is the letter that matters.

“I agree with Mr Lovell. The contract gives the insurer and the insured certain rights, but it also imposes certain duties on both sides. One of the duties imposed on the insured in relation to the use of his vehicle is that the operator must have a valid licence.”

I’m not in the business of soliciting business for insurance companies, but I would suggest that until authorities are able to clamp down effectively on “illegal” drivers every owner of a vehicle should opt for comprehensive coverage. At least then you would be able to make the claim on your own insurer rather than the one at fault and then leave your carrier to use its might to recover the money.

The problem with that, though, is that it only covers the motorist, his vehicle and the occupants.

Compensation

If you are an innocent walker who is knocked over and left in pain with a hefty medical bill, you are in for one hell of a ride. Don’t look to the insurance company for compensation, even if the person’s insurance was paid up but he or she had an expired driver’s licence.

And if you are in the habit to lending your car to friends or family to run errands, here’s what Lovell advises: “Ask every time to see the licence, because if it expired by just a day and the person gets into an accident you are on your own.

“The advice we have received from the Attorney General’s Office is that if we honour claims on the basis that the licences only just expired then we are condoning illegality.”

What more can I say? (RRM)