Insurance companies accused of taking advantage of policy holders

May 29, 2014 News

…lawyers say they intend to take immediate legal action

Attorneys-at-Law Charles S. Ramson and Sanjeev Datadin have lashed out at the Insurance Companies for a recent practice where Insurance Companies have been applying what they call an “unfair business practice” against policyholders. They are using what is known in the industry as “comprehensive” coverage and the lawyers say they intend to challenge it in the courts, immediately.

Attorneys-at-Law Charles S. Ramson

Insurance companies have now been offering to the comprehensive policyholders as a full and final settlement to their claim on a “write-off” or “constructive total loss” a sum of money that usually reflects about 60 per cent of the value of the sum insured, and then demanding that the policyholder sell their wrecked vehicle in order to recoup the remainder of the value of the insured sum.
The lawyers said that it was their aggrieved clients that have brought the practice to their attention. It is entirely unacceptable especially since all motorist are obligated by law to be insured and the motorist have an unfair bargaining position.
“Comprehensive” coverage in Guyana means, essentially, that the company will indemnify (or cover) the policyholder against loss or damage of the vehicle insured caused by accidents, fire, burglary/theft malicious acts, etc., not exceeding the insured estimate of value stated.
This is different from what is called “third party” coverage which essentially means that the Insurance Company will indemnify (or cover) the loss or damage to the vehicle belonging to the other driver in an accident.
Ramson says that he is “extremely disturbed about this practice” and questions, “What if the policyholder is unable to sell the wreck because he doesn’t know how to sell or where to sell or to whom to sell or what is the best price they can get?”
Ramson says that the Insurance Companies have forced the policyholder to become a seller and that it is a practice that must not be countenanced.
Ramson said that what is worse is that we find that the value of the wreck as stated by the Insurance Company is ostensibly overvalued and arbitrary.
The lawyer said that previously, when there was a constructive total loss the Insurance Company would keep the wreck and

Sanjeev Datadin

pay the policyholder the value of the vehicle insured less the deductible.
Now that this practice has changed, policyholders have been crying out because most times they are forced into a position where they need to accept the Insurance Companies’ offer because they need to replace their car immediately so they need money as fast as possible.
Datadin said that had the shoe been on the other foot then the employees of the Insurance Companies would not like it. The lawyer said, “It must be nice when you are setting the rules that you would not have to comply with because its application is discretionary.”
He said that it is likely that if one of the senior employees of the insurance companies was involved in an accident and the vehicle was determined as a total constructive loss and a claim was made on the company then there would be no offer to pay 60 per cent of the value insured and a demand for that employee to sell their own wreck to recoup the remainder of the sum insured; the offer would be for the value of the car and the pay-out would be immediate.
And Insurance Companies know that this is unfair but they have been getting away with it because it has not been challenged. Ramson added that the practice is particularly unconscionable because “I don’t see Insurance Companies going out of business in Guyana … in fact they are making billions… So why take advantage of policy holders like this?”