CLAUDIENNE EDWARDS Observer writer Sunday, June 28, 2015

Dear Claudienne:

I am a customer of ICWI, New Kingston head office. On December 3, 2014, I paid for car insurance to cover the six-month period from December 4, 2014 to June 3, 2015. However, I received a certificate of insurance to cover a period of three months from December 4, 2014 to March 3, 2015.

The third party payment plan (photocopy attached) requires me to pay the balance ($37,047.00) on or before March 4, 2015. I have no problem with this condition.

What I strongly object to is the fact that I have paid for six months and the certificate of insurance reflects only three months. I cannot understand why the insurance company has acted this way. This is far from equitable, and seems questionable.

Please check on this matter and let clients and prospective clients be informed.

RC

Dear RC:

Tell Claudienne spoke to the ICWI attorney at-law. The lawyer said that you had an annual car insurance policy but made a request to pay two six-month instalments. ICWI decided to facilitate your request through a payment plan that required you to pay up front 50 per cent of the annual premium for three months insurance coverage.

At the end of the three months when you paid the remaining 50 per cent of the annual premium, ICWI would give you a certificate of insurance to cover the remaining nine months. Under the ICWI payment plan there was no period when you would be without coverage, she said.

She said that you had agreed to this arrangement and had signed the payment plan. The lawyer said that you also got a verbal explanation of the plan as well as a payment schedule.

The lawyer made reference to a letter of complaint you sent to the Financial Services Commission (FSC) regarding the ICWI terms of insurance payment.

The FSC letter sent to you after they completed their investigation stated the following:

“ICWI informed the FSC that the policy in question covers two motor vehicles that are insured on a Third Party basis. They indicated that you opted to access the Third Party Payment Plan, which allows the client to pay annual premium in two instalments. ICWI also outlined that the conditions of the plan require that 50 per cent of the annual premium is paid for three months’ cover (based on the short-term calculation and not pro rata).”

FSC also stated that ICWI “expressed that the client has the right to seek other means of financing their premium if they are not in agreement with the conditions attached to the payment plan”.

The FSC in a discussion with you on March 19, 2015 stated the following: “There is no requirement for ICWI to offer customers a payment plan of any type. ICWI, having made the decision to offer their clients the option of making partial payments for coverage is acceptable to the FSC: however, the FSC’s mandate does not include stipulating terms of payment regarding insurance premiums and does not have the authority to determine or dictate conditions relating to premium financing.”

Tell Claudienne asked the Consumers Affairs Commission (CAC) for an opinion on whether the ICWI Third Party Payment Plan that you signed adequately explained to you that the initial 50 per cent payment gave you insurance coverage for three months.

The Third Party Payment Plan stated:

“I hereby agree that if the balance of $37,047.00 is not paid on or before 4 March, 2015, the company’s short-term rate, which is equivalent to the 50 per cent deposiit, is applicable.

I also agree that the administrative charge, which is collected with the first payment, is non-refundable.

Should the policy cover lapse for more than thirty (30) days during the policy year, the proposer will not be entitled to an increase in No Claim Discount for that policy year.

Should a claim arise during the current policy period, any outstanding premium for the year immediately becomes due and payable.”

The CAC was of the opinion that there was a missing document as the Payment Plan only spoke to the balance and not to the initial payment.

We then asked ICWI if you had been given a payment schedule in addition to the payment plan. ICWI told us that people entering into a Third Party Payment Plan agreement were not given a payment schedule.

ICWI said that an endorsement was attached to the Third Party Payment Plan agreement you received.

 

The endorsement attaching and forming part of your Third Party Policy stated:

“It is hereby noted and agreed that the payment due on March 4, 2015 must be paid on that date. Failure to comply with this condition will result in the policy being automatically cancelled on that date without any further notice being issued. Subject otherwise to the terms exclusions provisions and conditions of this policy.”

We also discussed your complaint with the Insurance Association of Jamaica (IAJ). After investigating your complaint, IAJ was of the view that the language in the endorsement attached to the payment plan was not legalese and clearly explained the terms of the agreement you signed.

It appears that you equated the initial 50 per cent payment to coverage for six months even though the endorsement made it clear that this was not the case.

Good luck.

Have a problem with a store, utility, a company? Telephone 936-9436 or write to: Tell Claudienne c/o Sunday Finance, Jamaica Observer, 40-42 1/2 Beechwood Avenue, Kingston 5; or e-mail: edwardsc@jamaicaobserver.com. Please include a contact phone number.

http://www.jamaicaobserver.com/business/ICWI-customer-confused-over-payment-plan-_19153017