Dear Claudienne,

I am writing on behalf of my brother.

On August 26, 2014, I was travelling with him in his motor vehicle, when we were hit by another car. On the date of the accident the driver of the other vehicle accepted responsibility for the accident in the presence of police officers who arrived on the scene.

My brother’s vehicle is a 2007 Mitsubishi Pajero and he is insured with Advantage General. The car that hit his vehicle was also insured with Advantage.

My brother submitted a claim within the time specified by the insurance company along with all the required documents.

After two months, during which time he made numerous telephone calls to the insurance company, he was advised that his vehicle would be written off as a loss. However, Advantage told him that he would not be paid the amount of money that the vehicle was insured for, as the valuator had overvalued the vehicle by $700,000.

This was despite the fact that the insurance company had accepted the valuation and had given him a premium based on this valuation. My brother had paid the premium in full. The valuator recommended by Advantage had valued the vehicle for J$2,850,000.

My brother told the insurance company that the settlement proposal was unacceptable as the vehicle valuation for J$2,850,000 had been done on July 16, 2014, approximately six weeks prior to the accident, by the loss adjustor company recommended by them.

He has been trying without success to have this matter settled. Every week when he calls the company it is the same response: “We are still processing the claim; call us back next week.”

It has been very hard, as he lives in Trelawny and works in Savanna-la-Mar. To date (December 9, 2014) the insurance company has only agreed to pay for car rental service for four weeks.

Is there anything that you can do to assist him in getting his claim processed? We would be forever grateful.

FC

Dear FC,

After receiving your e-mail dated December 9, 2014, we contacted the claims manager at Advantage General. She informed Tell Claudienne that she had never spoken to your brother but was aware that settlement options had been communicated to him under cover letter dated November 11, 2014. She also said that your brother had retained the services of a lawyer and that the company “would prefer not to provide any further information until our negotiations with the attorney have been concluded”.

Tell Claudienne contacted your brother, who pointed out that although his attorney wrote to the insurance company on November 20, 2014, they had not responded to the letter up to the time you wrote to us on December 9, 2014.

Your brother sent us a copy of the letter he received from the insurance company.

Pertaining to the settlement the letter stated the following:

“Please be advised that the assessor…. provided a market value of $2,150,000; we are aware that a valuation was done by…… on July 3, 2014 with a value of $2,850.000 given by them.

“In light of the above we would consider one of two options:

“(1) Averaging the original sum insured and pre-accident values which would amount to $2,500,000. The value of the salvage (residual value of the vehicle) is $650,000 and this amount will be deducted from the settlement offer. The settlement also is subjected to the deduction of a policy excess which is three per cent of the pre-accident value.

“(2) Settling on the pre-accident value and recalculate the premium using a value of $2,150,000 and will refund the difference in premium which amounts to $7,632.21. The value of the salvage (residual value of the vehicle is $650,000 and this amount will be deducted from the settlement offer). The settlement is subjected to the deduction of a policy excess which is three per cent of the pre-accident value.

“Kindly let us have your decision at which time we will provide further documentation and requests as it relates to the settlement.”

After your brother sent Tell Claudienne a copy of the settlement proposals he received from the insurance company on December 17, 2014, we informed the claims manager that we would be asking her via e-mail to clarify why it had taken the insurance company a protracted period to respond to the letter from the lawyer urging them to accept the initial valuation which Advantage said was done on July 3, 2014 for J$2,850,000.

The lawyer’s letter dated November 20, 2014 to Advantage had stated: “We strongly urge you to accept the initial valuation by…… and request that the full J$2,850,000 be used to calculate any settlement in this matter.”

On the same day, December 17, at 3:49 pm Tell Claudiene received an e-mail from you and your brother advising us that the insurance company in a letter to the lawyer earlier that day, December 17, 2014, made a “new proposal”. The insurance company accepted the initial valuation of $2,850,000 and agreed to use this figure to calculate the settlement of your brother’s claim.

The letter to your brother’s lawyer apologised for the “delayed response”. The letter stated the following:

“Further to telephone conversation between (the lawyer) of even date wherein you were informed that our settlement decision as outlined in our letter dated November 11, 2014 was on the principle of indemnity. However, further review of SM’s policy has revealed that his policy is an Agreed Value policy, which means that any offer of settlement should be done using the sum insured afforded by the policy.

In light of the above, our revised settlement offer is outlined below: Sum insured $2,850,000, less salvage $650,000 equal $2,200,000, less excess $85,500 equal $2,114,500.”

Tell Claudienne asked the claims manager of the insurance company to clarify why in the proposed settlement letter dated November 11, 2014 to your brother the principle of indemnity was not mentioned.

We also asked her to explain the meaning of the principle of indemnity.

We received the following response from the claims manager:

“The principle of indemnity was not mentioned in our letter dated November 11, 2014 to SM as we were responding directly to an e-mail that he had sent.

“As requested, attached is an extract of the Advantage General’s Motor Vehicle Policy Booklet which has the definition of ‘indemnity’.

“Trusting that you will find our response adequate.”

Advantage General’s Motor Vehicle Policy Booklet states that indemnity means “Compensation which is sufficient to put the insured in the same financial position after the loss as he was in immediately before the loss took place. The measure of indemnity in the event of a Total Loss/Constructive Total Loss will be based on the market value or insured’s estimate of value, whichever is less.”

Insured’s estimate of value means “The sum for which the vehicle is covered. It is the maximum amount payable by the company for loss or damage to the vehicle and the sum to which the Excess will apply.”

We note that your brother has now received a cheque from Advantage General in settlement of the money owed. We see that he is pleased that the sum he received was calculated on the basis of the $2,850,000 that his vehicle had been insured for.

Good luck.

Have a problem with a store, utility, a company? Telephone 936-9436 or write to: Tell Claudienne c/o Sunday Finance, Jamaica Observer, 40-42 1/2 Beechwood Avenue, Kingston 5; or e-mail: edwardsc@jamaicaobserver.com. Please include a contact phone number.