Cedric Stephens | As claimants struggle with claims, a tech tool for insurers to ponder

The ‘news gods’ in their infinite wisdom, forced me to return to this topic three Sundays after I wrote Part One.

The sign was when they gave me details about a simple 2024 motor claim. It involved two vehicles, a seven-digit repair estimate for one and minimal or no damage for the other, two insurers, one intermediary, and no dispute about who was at fault. A straight-forward collision with no personal injuries. Six months have elapsed, yet the claim remains unsettled.

Part One of this article featured a small accident where both vehicles were insured with the same company, but it took nine months to pay the innocent party. I also know of another claim that occurred on private premises over 12 months ago, where liability has been clearly proven yet the third-party insurer has still not settled.

The lengthy delays with these three claims are, I suspect, symptoms of a big problem that is ignored.

When the intermediary in case number one was asked to give an estimate of the time frame for settlement and when reimbursement of the costs incurred by the innocent party, ($300,000 approximately), would occur, its agent’s response was subtle, memorable, and unapologetic: “Parson cris’n ‘im pickney fuss!”

That statement means, for the uninitiated, that it is the norm for insurers to place their interests above those of their customers. This is despite the duty of care that insurance companies and intermediaries owe customers. That rule forms part of the Insurance (Amendment) Regulations 2022.

If there were any doubt about what Yaneek Page described in last Sunday’s Gleaner, as “the frightening fragility and gaps in regulatory oversight of our financial industry”, this six-month old claim, plus the other two, are specific examples of some of the things that ail the motor insurance segment.

Motor insurance claims that meet the criteria in this article’s top paragraphs should take no more than an average 15 to 30 working days to be settled. I will show that there are persons in the local insurance industry who have the knowledge, experience, information about claims procedures and processes, and are familiar with the technologies to resolve the problems that motorists and others are experiencing with the dysfunctional compensation system that was established by the Motor Vehicles Insurance (Third-Party) Risks Act.

The remainder of this article will provide proof why the implicit six-month settlement estimate in case number one is too long, and that motor insurers can settle some claims in a much shorter time. Industry members should be working to reduce or remove some of the daily hassles that motorists and others are facing, and improve customer service – much in the same way Tax Administration Jamaica and other government agencies are now doing.

Bank of Jamaica, which now supervises the insurance regulatory agency, the Financial Services Commission, should take note if it wishes to avoid the FSC’s mistakes while it ascends a steep learning curve. It must find the right balance between the advice of overseas consultants who are often unfamiliar with the reality on the ground and home-grown experts.

Profile of a solution provider: K. Mike Webster, FSC-licensed insurance adjuster, certified forensic animator, forensic traffic investigator and founder and CEO of Advanced Insurance Adjusters Limited.

Facts about how the accident in Case No. I occurred:

• Location: The Florizel Glasspole Highway (Rockfort Road), Kingston, at the pedestrian crossing, adjacent to the premises of the Caribbean Cement Company.

• Claimant’s vehicle: 2018 Mercedes Benz GLC 250.

• Direction of travel: Stationary (travelling towards Harbour View) at the front of a line of traffic, on the left side of the road, while allowing pedestrians to cross the road.

• Third-party vehicle: A truck (travelling towards Harbour View).

• Damage to claimant’s vehicle; and particulars of damage to truck: right front side of the Mercedes Benz resulting in estimated repair cost of $1,086,000; Left rear side of the truck collided with Mercedes Benz’s front end, resulting in minimal damage.

• The person at fault: The truck driver, because he: 1) overtook a stationary line of traffic as he approached a pedestrian crossing; 2) his actions were unsafe and caused the collision.

At 1.56 p.m. on Saturday, October 5, I asked Advanced Insurance Adjusters to:

1) use the facts about how the accident had occurred that I supplied to create a diagram of the accident scene;

2) explain what actions the company could have taken to reduce the settlement time and in what time frame; and

3) estimate the costs that would be involved for providing items 1 and 2.

Advanced Insurance Adjusters sent me, on Monday, October 7, at approximately 8:30 a.m., four enhanced diagrams of the accident scene, one of which forms part of this article. The driver of the claimant’s vehicle has confirmed that it is a reasonably accurate representation of the scene.

The digital accident scene diagram is a major improvement over the more than over half-century-old, paper-based data collection instrument that motor insurers currently use, and which excludes road markings, no parking zones, traffic signs, lights, and surveillance cameras.

When ignorance about the new Road Traffic Act and regulations on the roads and in the claims departments of insurers are coupled with the shortcoming in insurers’ data collection instruments, disputes about liability between insurers, drivers, and witnesses are the order of the day. Insurers are ultimately the beneficiaries of the status quo because the regulators are asleep.

Here are a few more features of the Advanced Insurance Adjusters’ damage assessment package:

• It can include accident scene diagrams as well as videos that are intended to replicate what happened;

• Photographs of the crash profile of the vehicles can be used to provide estimates of repair costs of most types of vehicles;

• In cases where drivers’ statements are inconsistent with the crash profiles of vehicles recorded in photographs, negative inferences can be drawn about the veracity of the drivers;

• Opposing parties have the right to examine and challenge the accuracy of the diagrams/videos;

• Accident scene diagrams can be generated across all parts of the island; and

• The information that is provided by the company is based on science.

The company has made significant investments in technology and training over the last few years, to build capacity. It has expressed confidence that those efforts have the capacity to create improvements in the claims settlement process for motorists, insurance companies, and the society at large.

If insurers and the regulators conclude otherwise, do they have a better alternative?

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 or business@gleanerjm.com