A look at those insurance policies

Mar 26, 2018 Letters

Dear Editor,
I refer to a letter written by Mr. Roshan Khan in the Stabroek News of Wednesday, 5th June, 2013 (Full Third Party vehicle insurance ridiculously low).
Mr. Khan is quite right in highlighting this major problem for persons who use the roads and are injured or have their vehicles damaged. The Limits, which I believe have been on the books for over 40 years, are as follows.
Bodily Injury                                 Property Damage
$ 25,000: Any one Person                     $ 20,000: Any one Claim
$125,000: Any one Accident                $100,000: Any one Accident

Many persons opt to carry higher limits and almost all the insurance companies offer higher limits. However, the fact remains that a person can be compliant with the law, with little or no protection.
My recollection is about ten (10) years ago a document was sent by the Government to the Insurance Association of Guyana proposing new third party limits. However, the Insurance industry was not in agreement with the new limits being proposed and felt that the increases were too drastic and would have resulted in very high premiums. I understand the industry proposed a more moderate increase but nothing was done.
I think the time is more than opportune for the government to amend the law, raising the third party limits. My view is that it should start somewhere in the vicinity of $500,000 any one person and $1,000,000 any one accident, gradually increasing over a three (3)- four (4) years period to $1,500,000 any one person, $2,500,000 any one accident.
Some Companies offer limits as high as $3,000,000/$5,000,000 any one person/accident, so getting the cover should not be a problem. The owners of minibuses may find the new limits challenging but I believe overcoming those challenges will be worthwhile in the long run..
We also have a lot of miss-selling of Motor Insurance especially by the auto dealers on behalf of Insurance companies. It is not unusual for persons to have ‘Full Comprehensive’, with a vehicle being covered for $4M, $5M or $6M) with Third Party Act limits. I recently came across a case where a businessman who bought insurance through an auto dealer had his vehicle insured for $7M with Third Party limit of $80,000: When he found out, he was flabbergasted.
I suspect that the majority of persons carrying Comprehensive Insurances sourced through auto dealers have very limited Third Party coverage. They find this out to their disappointment and financial crisis at the time of an accident. Regrettably some insurance companies are complicit in this.
As I indicated earlier in this letter, many insurance companies routinely offer higher limits. I have no doubt that we are going to hear the old worn out reasons why the limits should not be increased eg. persons cannot afford it, it will carry up the cost of living etc. But these same vehicle owners can afford the latest gadgets in their vehicles.
It is time for the limits to be increased and I respectfully call on the Attorney General to introduce legislation to up the limits.
Bishwa Panday

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