December 29, 2016

A Compulsory Third Party Insurance (CTPI) is a form of insurance that protects any person that you might injure while you are driving a vehicle, including pedestrians, cyclists, and other road users. CTPI provides against losses incurred as a result of traffic accidents and any other liabilities that could be incurred in an accident.

Therefore, this form of insurance does not cover for damages to your vehicle, other vehicles/property, or theft of your vehicle or its contents.

 In Fiji, the Motor Vehicles (Third Party Insurance) Act Cap 177 and Land Transport Act 1998 makes it compulsory for all registered motor vehicles to have CTPI cover, unless exempted by the Minister of Infrastructure and Transport.

 It is always the case that when a person makes a claim as a victim of a car accident, there are several conditions imposed on payout claims.

 In the rare event that claims are paid out, the amounts paid out are insufficient to cover losses incurred by the victims. In many cases, settlements are of measly amounts compared to the injuries sustained by the victims.

 Pursuant to the current law, a bus of 40 people has an accident cover of $40,000 for a whole bus or $4,000 for a passenger. When a compensation for a busload of 40 is calculated, each passenger ends up receiving $1000 each. Families of accident victims or victims have to knock the door of the court if the $4000 per person does not happen to be fair and reasonable.

 In addition, insurance companies take longer periods to process claims subjecting claimants to long waits.

 The third party policies creates a false sense of security through payment of a compulsory (annual) insurance cover which then is weaved in with various exclusion clauses in favour of the insurance companies who provide the cover.

 The Council received a complaint some years ago whereby a victim due to exclusionary clauses was not provided with any form of compensation.

 One Peter Prasad was traveling in a vehicle on his side of the road. The driver of another vehicle crossed his vehicle to the center line of the roadway and had a collision with a vehicle driven by Peter Prasad. Peter was seriously injured. The vehicle driven by the other driver (Nand Kishor) belonged to one Sarika Chand, who had hired the vehicle out to Nand for $100 per week. Nand was conveying one passenger in return for a payment of $35. The injured third party (Peter Prasad), commenced proceeding against Sarika Chand and Nand Kishor. Neither of them took steps to get the insurance company to pay under the CTP policy. Judgment in liability against them was obtained by default and damages were proved at a hearing. The Defendant, an insurance company, had issued a Third Party policy to Sarika Chand for the vehicle. The cover issued was for a goods vehicle. The premium was $90. The policy contained exclusions and defined the persons or classes of persons entitled to drive and enjoy cover under the policy. The main term was as follows:

“Limitation as to use Premium had been paid for only the use  of the motor vehicle for the purpose set out and the motor vehicle was not be used for any other purpose unless the policy was endorsed and extra premium (if any) paid.”

 The Court ruled in favor of the insurance company.  The consequence was that Prasad, an innocent third party victim of an accident, was almost permanently incapacitated, with no source of income, and no remedy in the country. Technically, the Insurance Company was exempted from paying compensation to an innocent victim.

Unfortunately, there are irregularities and limitations in the pay-outs, as it is left entirely on the industry to make the decision. The claimant or third party victim can seek courts’ assistance to get a fair claim if the claim is rejected or the amount is negligible. Often the accident victims (or the deceased’s family) are left wondering if justice is indeed served under the current systems, policies and laws.

Depending on the seriousness of an accident, victims have to fork out expensively to cover medical costs, legal costs, etc. Insurance claims take time and are expensive if an ordinary person decides to pursue the matter.

Most of the accident victims know very little or nothing at all on what Third Party Insurance is and how it actually works. Let alone making claims for injuries sustained through vehicle accidents. It is vital to educate drivers and non-drivers as to how third party insurance works.

Insurance companies need to be more transparent about the information they provide to consumers concerning its third party policies.