Cedric Stephens Risk management ideas for the transport ministry
The Motor Vehicles Insurance (Third-Party Risks) Act created the legal structure within which motor insurance is to be conducted. Section 5(1)(b)(i) says that to comply with the requirements of the act, the policy of insurance must “insure such person, persons, or classes of persons … against any liability incurred by him or them in respect of the death of, or bodily injury to, any person”.
Death and bodily injury are the keywords.
The Jamaica Information Service, the government’s communication arm, while reporting on the passing of The Road Traffic Act in the House of Representatives in February 2018, quoted then Minister of Transport, Mike Henry, as saying that the aim of the new law was “to reduce injuries and loss of life on the nation’s roads”.
Why is it that now, four years later, the traffic accidents statistics that are being collected and disseminated by the Road Safety Unit and the National Road Safety Council, (NRSC) parts of the transport ministry, are limited to fatalities? Why is no data being recorded about the number of persons who are injured? Isn’t this information important?
If this and other important datasets are not being captured and analysed, can effective strategies be developed and plans executed to reduce the number of injuries and deaths on the island’s road system?
According to The Journal of Transport & Health, “road traffic safety is a significant public health issue … traffic crashes are frequent, as well as the deaths and injuries caused by them”.
Information on the Ministry of Transport’s website does not lead one to believe that crashes are being treated as an urgent public-health issue. An example: Reducing injuries and the loss of lives on the island’s road system does not receive the same degree of prominence at this agency’s digital address as COVID-19 – another public-health issue – has been given on the Ministry of Health & Wellness website.
The information provided by the ministry about fatal crashes is of an inferior quality. National Road Safety Council data are seven years out of date and do not provide a comprehensive picture of the mayhem that is taking place daily on the roads. There is no evidence, for example, that the limited data that are being collected about past events are being used to predict when and where mishaps are likely to take place in future or to guide traffic enforcement activities.
Are strategic and operating decisions about traffic management driven by data?
This is the case with the health ministry. Its clinical management summaries display almost real-time information about the status of the pandemic and how it is being monitored and managed. Key performance indicators are listed, namely new cases, parish breakdown, deaths, recoveries, hospital management, testing, and deaths by vaccination status, over 10 days. Two thousand six hundred and seventy-eight COVID deaths were recorded between March 1, 2021, and August 16, 2022.
According to a Jamaica Observer, July 31 article, ‘Crashing the economy’, motor vehicle accidents claimed 1,700 lives over the last three years and “upwards of $36 billion paid out in claims, and hundreds of millions in life insurance claims”. Excluded from that data is information about the thousands of persons who were maimed, the pain and suffering they endured, and the income that they lost.
The same article referred to a 2017 study which estimated that 10,000 persons are injured annually in road traffic accidents. The life and non-life insurance price tag for motor vehicle accidents, like the Road Safety Unit and NRSC data, provides an incomplete picture.
Two subgroups of accident victims are excluded from the insurance industry statistics. Firstly, persons who, for one reason or the other, are unable to access the compensation system due to the lack of insurance coverage. Industry sources estimate that one out of every four vehicles on the road is uninsured. As a result, hundreds of persons – perhaps thousands – are left to suck salt when they suffer the misfortune of being involved in mishaps with uninsured vehicles.
The second group consists of persons who get insurance payouts that are less than their claims. These situations occur because of monetary limits in insurance policies. Accident victims’ expectations of receiving compensation for personal injuries and property damage that arose because of the negligence of a motorist often face the reality that they must fund part of their losses.
The limits in the Motor Vehicles Insurance (Third-Party Risks) Act have remained scandalously low for at least four decades. They are the lowest in the English-speaking Caribbean and out of line with present-day court awards. The current limits for death or bodily injury claims are for “any one person a sum of not less than $1,000,000 and a total liability of not less than $3,000,000” for “any one accident”.
Meanwhile, the road infrastructure is being upgraded island-wide, and the Road Traffic Act and Regulations are being revised to meet ‘global standards’.
Recent victims of multiple vehicle collisions and family members – more than 10 of these accidents have occurred during the last five months by my counting – including public passenger vehicles carrying three or more persons are like to face nasty surprises when they leave hospitals and start the process of rebuilding their lives.
Section 122 of the Insurance Act gives the regulator, the Financial Services Commission, the authority to establish a contributory scheme funded by insurers and intermediaries to cover prescribed risks if the minister, on the recommendation of the regulator, determines that it is in the public interest to do so and if a particular insurance coverage is not available.
Would it be appropriate for the insurance regulator to start the process that leads to the setting up of a scheme to provide support to the victims of uninsured and hit and run vehicles?
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