Cedric Stephens | Jamaica needs a compensation mechanism for victims of uninsured drivers

Today’s article is a gift to the people of Jamaica – especially to those families that struggle with tragic losses caused by hit-and-run drivers and the thousands of other victims of road accidents who wrestle to get compensation but end up empty-handed due to uninsured motorists.

Successive governments know about these problems but have done little to resolve them. This essay is intended to outline the contours of a solution that follows the approaches adopted by foreign governments.

As with some grants, there are strings attached to this one. The conditions, however, are not onerous.

Condition number one is that since general elections are imminent, and implementation will require the support of a state actors, this bequest of ideas is being directed to the two main political institutions, that is, the Jamaica Labour Party and the People’s National Party. They are agents of the people that are competing for office in the next elections.

The second string associated with this gift is that the next JLP or PNP administration will implement the proposals in this article or a variant of it after they have assumed the reins of power.

Policymakers and bureaucrats often use the words resource constraints as one of the main excuses for not getting things done. The phrase is a polite way of saying there is no money to do ‘XYZ’ or because they feel a particular set of ideas is not in the national interest.

The non-allocation of funds in the country’s budget should not be a barrier to implementation of this concept. Further, it will not be necessary to raise taxes to meet the recurring operational costs associated with implementation.

Legislative changes will be unnecessary to operationalise the idea. Section 102 of Insurance Act 2001 contains specific information about the potential source of funds. Cabinet approval and the signature of the minister of finance will be the only requirements.

The lead article in last Sunday’s Gleaner, ‘Hit and Gone’, contained information that showed that there were, on average, 31 hit-and-run fatal road accidents in the country each year during 2020 to 2024. This data is incomplete. It excludes pedestrians and other road users like pedal cyclists and motorcyclists, and passengers in other vehicles who suffered injuries because of the negligence of drivers who failed to stop after collisions, as is required by law. No estimates are available about how many persons fall into this group.

Motor insurers estimate that one out of every four vehicles, or 25 per cent of all vehicles on Jamaica’s roads, is not insured as is mandated under the Motor Vehicles Insurance (Third-Party) Risks Act or MVITPRA. When hit-and-run drivers are added to the hundreds (perhaps thousands) of people who have been killed and/or injured in motor vehicle crashes or who have suffered property damage, each year, it should be obvious that people in the combined two groups and/or their legal representatives will not receive compensation as was intended when MVITPRA came into effect nearly 80 years ago. They have suffered and continue to suffer the pains of physical, mental, and economic losses due to no fault of their making.

While several government departments are talking about digital transformation and the adoption of artificial intelligence technology to improve operating efficiency, members of these two groups are literally and figuratively being left to suck salt out of a wooden spoon.

Eighty years ago, the United Kingdom government created an institution, the Motor Insurance Bureau, (MIB), whose primary function is to compensate victims of accidents caused by uninsured or untraced drivers. Its mission is to ensure that innocent parties are not left without recourse. It is the gold standard of institutions that have been established to meet the needs of this group. The MIB was incorporated as a private company that is limited by guarantee.

The MIB operates several schemes to assist victims: the Uninsured Drivers Scheme, which provides compensation for accidents caused by uninsured drivers; Untraced Drivers Agreement, which covers victims of hit-and-run incidents; and the Green Card Scheme, which helps victims of accidents involving foreign motorists.

The MIB’s mission is to reduce the level and impact of uninsured driving in the UK and to compensate victims fairly and promptly. It is funded by levies imposed on all insurers underwriting compulsory motor insurance as required by the Road Traffic Act 1988. The cost is borne by law-abiding motorists through their insurance premiums.

The total amount collected from insurers varies each year. For example, in 2022, the levy was £477 million. Since insurers pass these costs onto policyholders, law-abiding motorists indirectly fund the MIB through their insurance premiums.

The MIB allocates its funds to compensate victims of uninsured and untraced drivers; manage the Motor Insurance Database, which helps police identify uninsured vehicles; and support the Continuous Insurance Enforcement scheme, which ensures that all vehicles have valid insurance.

Different countries have various mechanisms to compensate victims of uninsured drivers, often depending on their legal and insurance frameworks.

United States: Many states have Uninsured Motorist Funds, which provide compensation for victims. Drivers can purchase uninsured motorist coverage as part of their insurance policy, allowing them to claim compensation from their own insurer if hit by an uninsured driver.

Canada: The Facility Association ensures coverage for high-risk drivers and compensates victims of uninsured motorists. Some provinces have government-backed compensation funds for victims of uninsured drivers.

Europe: Many countries have national motor insurance bureaus that operate under European Union regulations to protect victims. The Green Card System allows cross-border compensation for accidents involving uninsured foreign drivers.

Australia: The Nominal Defendant Scheme provides compensation for victims of uninsured or unidentified vehicles. Some states have statutory insurance schemes that cover personal injury claims.

Caribbean & Latin America: Some countries have government-backed insurance pools or compensation funds for victims of uninsured drivers. Legal frameworks vary widely, with some nations relying on civil litigation for compensation.

This column was initially conceived as a forum for solving the risk and insurance problems of individuals. Today’s piece is framed to address a problem that affects hundreds of citizens. It is hoped that the existing and aspiring ministers of transport will take note and add this item to their to-do lists.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com