Select insurance companies have reduced their accident coverage limit by half or $5 million, in order to limit exposure and abuse by ambulance chasing lawyers amongst other things, says Nunes Scholefield DeLeon managing partner Lowel Morgan.

The number of personal injury suits filed in the supreme court has increased significantly over five years due to a rise in attorneys jostling for work and the imitation of the litigious US legal system, he said.

“A year or so ago limits were $5 million to $10 million. They are down to $3 million to $5 million or to the Act Limit,” Morgan told members of the Rotary Club of Liguanea Plains in his address on Thursday evening at the Eden Gardens Hotel.

Morgan added that other insurance companies, such as American Home Assurance Company, have dropped motor vehicle insurance from their portfolio altogether. Other companies, he said, are increasingly refusing to insure clients such as taxis and are stringently enforcing the policy terms.

“A direct consequence is the increased number of uninsured vehicles on our roadways,” he reasoned.

Morgan recommended that the public know their coverage limit and attempt “to increase the limit coverage to at least $10 million for individual personal injury and $5 million for property damage”. Also be aware of time limits for bringing claims against the insurer, drive with increased caution and choose a good insurance company not just the cheapest. On the other side he said that, generally, the public is becoming more aware of ways to protect their rights.

“The Jamaican public is becoming increasingly aware and more cognizant of their rights. Lawyers are getting more creative and hence have been able to establish networks with policemen, medical practitioners physiotherapists at hospitals,” said Morgan who is a member of the Litigation Department and practices maritime, insurance, arbitration, employment and landlord & tenant law.

The Caribbean Insurance Report 2010 published January of this year described the region as “something of a backwater” as far as the market for insurance goes. The report said that except for life insurance in Trinidad and Tobago and non-life insurance in Jamaica, insurance remains underdeveloped.

“Perhaps for this reason, the major multinational insurance companies have little representation on the ground”, it said, noting that while the American International Group (AIG) has small operations in Jamaica and Trinidad and Tobago and Spain’s MAPFRE owns substantial businesses across Latin America, those are the exceptions.

“In general, it is local institutions — like Seguros Banreservas in the Dominican Republic, Jamaica International Insurance in Jamaica or RoyalStar in the Bahamas — or regional groups such as the Trinidad and Tobago-based Guardian Holdings or the Barbados-based Sagicor Financial that dominate,” it added.

The report also contended that the competitive landscape “has been complicated by the financial problems of the Trinidad and Tobago-based Colonial Life Insurance Company (CLICO) and British American Insurance Company (BAICO)”.

It said that as the major ratings agencies have downgraded the outlooks of countries in the Caribbean, the values of the insurance companies’ bond portfolios have suffered. It noted that Sagicor Financial, for example, has itself been downgraded because of the cutting in Barbados’ sovereign risk rating.

Of the five countries profiled in the study, the report said, Jamaica and the Dominican Republic have not enjoyed the long-term political and financial stability that is necessary to develop a substantial offshore financial services sector.