A relatively new group representing taxi operators is lobbying insurance brokers in an effort to secure reduced motor vehicle insurance rates for its members.

The one-year-old Hackney Carriage Association of Jamaica says it has embarked on a training programme to give its members a more professional image, as part of its effort to convince insurance companies to lower their rates.

“We are trying to present ourselves as professional taxi operators and when they (insurance companies) see what we are presenting we hope they will come on board,” the association’s president Williard Costley told the Sunday Observer. However, insurance executives say vehicles operated as taxis are among the highest risk for insurance, with most companies refusing to insure them at all.

As a result, many taxi operators lie to insurance companies about the use of their vehicles and who will be driving them, in order to obtain insurance, thus risking claims being voided.

“There is a fair bit of fraud that goes on,” said Ian Miller, managing director of Billy Craig Insurance Brokers, who estimates that one in three drivers on Jamaica’s roads are uninsured.

As a result, insurance companies are employing more investigators to probe accidents involving vehicles they cover, before paying claims. Currently, only two out the 12 insurance companies operating in Jamaica will insure taxis, and even then at much stricter terms than vehicles used for other purposes.

“There are only a couple of companies that insure taxis, namely Advantage General and NEM,” Miller disclosed.

“A taxi operator would pay a higher premium than someone who uses their vehicle to drive to and from work. There is more exposure to damage to that vehicle and to other vehicles on the road,” he said.

“Taxi drivers, for the companies who do insure them, are different from the rest of the insuring public,” said Claudia Roye, underwriting and claims manager at British Caribbean Insurance Company (BCIC).

“They do have more accidents than the normal, as they are racing on the road for up to 18 hours a day, and most are not owner driven.”

However, older more experienced taxi drivers are able to secure insurance without much problems.

“I don’t believe that you can actually buy insurance to cover a taxi driver under 25 years old; that person must have a PPV (public passenger vehicle) licence for at least three years,” Miller noted.

Which is why taxi operators bend the truth – either about the use of their vehicle, or who will be driving it.

“It’s a big problem. If you look at a taxi stand and there are drivers there obviously in their early twenties, they probably don’t have insurance,” Miller stated.

Usually, the owner of the vehicle tells the insurance company a person with the relevant experience will be driving, and then gives the vehicle to younger, inexperienced driver. But if this is done, the company has the right to void the policy. “They (insurance companies) do find out, usually after an accident occurs. They either void the policy or refuse to pay the claim,” Miller noted.

But despite the challenges, Costley is batting for his 400-member strong organisation, all of whom he says are insured to operate.

“We are trying to get insurance rates we consider reasonable for our members because the rates for public passenger vehicles is rather expensive. We are also trying to encourage more people to operate according to their licence,” Costley said.

Entertainers – another high risk group

Another high risk group for insurers is high profile entertainers.

“Professional entertainers, usually because of their lifestyle, (insurance) companies are not so keen on them,” Miller noted. “Obviously, they buy expensive cars, but also lend them to all and sundry to drive. In the event of an accident, often you can’t get statements to find out what really happened. Sometimes the person who claims to be the driver, is not.”

He noted that some entertainers, knowing they can’t get insurance for themselves, may choose to buy it in another person’s names, perhaps a manager or a girlfriend – someone “who is a bit more stable”.

However, Miller denied claims that journalists were among occupations that had trouble getting insurance.

“I have not heard of journalists having an issue with insurance,” he said. The complexities of motor insurance and the prevalence of fraud has led insurers to do more investigation for themselves into accidents.

“More and more these days the insurance company will send in a investigator who may trace down the passengers (in vehicle that has been in an accident) and ask what’s your relationship to the driver,” Miller said. Such investigations sometimes reveal that a vehicle was being used as a taxi or some other purpose, which may result in a claim being voided.

He is also urging the police to pay more attention to the problem.

“I find that quite a few police officers don’t understand the insurance documents as to who should be driving and what the vehicle should be used for,” Miller claimed.