The car owner’s headache, and the role insurance firms play to worsen it

The plot thickens. Despite crusading under the banner of affirmative action, I had correctly guessed that this story has more to it than I had been told. I had also promised to address this matter from a non-gender perspective this week. Little did I know that these two all led to the same common denominator: insurance.

What follows is the second instalment of this frankly bizarre development and the first disquisition around the topic of insurance.

Part I: A Comedy of Errors
Our protagonist this week will be baptised Earl* for reasons I made obvious last week. He got in touch with me as soon as last week’s article was published and claimed to be not only familiar with the case itself, but was also actively involved in it at some point.

He insists the matter stemmed from miscommunication from the insurer, and a lack of proper grasp of the local rules of engagement by the aggrieved, Miss Fiona, who he suspects has lived overseas for a considerable amount of time, a place where society is generally advanced, and she thus greatly overestimated the sanity of Kenyans as far as the aftermaths of traffic incidents are concerned.

Names have been changed, including the insurer’s, but the rest of the report is lifted verbatim from Earl’s emails:

“...Now, from what I know, the car was in an accident. The transmission was damaged together with, I think, the front left hand wheel, fender, and probably bumper. Now, Correlative Ltd, as with other insurers, have developed this poor system of assessment centres, a subject which maybe you can interrogate further, because it’s not working as intended in my opinion, and mostly to the detriment of the car owner. A lot of issues on quality of parts as garages try to undercut each other to win jobs.

“When the Audi got the accident, it was subjected through the normal process of assessment, then garages were invited to bid. However, it appears all got scared to bid because of lack of expertise and possibly parts for an Audi Q3.

You can imagine if a garage took it on and could not fix it, the amount of flak they would be getting right now. So the insurance company asked her to take it to a garage of her choice for purposes of getting a quote so that they know if the car is repairable or otherwise because it is perfectly in order for a claim to be settled in cash in lieu of repair.

So she did not provide this in a timely fashion, and in the midst of these issues is when she landed on San Texas* and later Spear Head*.

As with most insurers, the moment you are engaging garages outside their panel, they do not come in between or play any role. They will just wait for communication from the client that the repairs are done, and to send an assessor to reinspect. Most of the incidental costs for cash in lieu settlements are also done on reimbursement basis, so the costs Spear Head was asking for, whether warranted or not, would have been very easily reimbursed by Correlative Ltd upon production of payment receipts.

I suspect that due to the mistrust the client had already developed with the process, coupled with the discovery that Spear Head had lied that they are dealers made the situation even worse. But the costs of diagnosis, etc, would have been payable.

In this regard, her agent failed in her duty to fully explain what the process is and what to expect. The claims analyst, on the other hand, also did not push her for a quote. Once they ask for it, the onus is on you, the client to provide it if you have agreed not to use their garages. It is very easy for someone to forget about you and few insurers in Kenya will look for you to give you money.

The claim analyst advised they couldn’t process the claim with the assessor’s estimates alone because they could actually have been lower than what the garage would have quoted and consequently, had they made an offer based on that, it would have disadvantaged the client.

I’m hoping she shared the full facts of the matter, including a role, if any, that she played in the debacle. I hope she got help or had the vehicle repaired. It’s shocking how the matter turned out. When I tried to offer help, she was quite combative, so I had to step aside and let her deal with it.

Last time I dealt with such a case, the insurer authorised us to source for the parts directly from Toyota Motor Corporation in Japan. The motor insurance policy allows for that as a last resort, especially where the open market lacks parts. However, the insurer is not allowed to pay for shipment by air, although they’re required to meet the cost by any other means.

“Encourage readers to choose their insurers wisely, read and understand their policies and their provisions. Most importantly be proactive when it comes to claims... but I also feel you have an opportunity and a platform through her case to shed light on some of the challenges the consuming public faces with insurers. It would help all of us create a better space in this field....”

Well, this opens a whole new can of worms. I mean firstly, whether or not the insurer lacks communication skills hardly excuses Phillip’s* behaviour as described last week. But we’re past that.

Also, the narrative I posted previously was exactly as presented to me: I added nothing and I held nothing back. The developments are starting to descend to finger-pointing, so let’s move on swiftly...

Part II: The Empire Strikes Back

Earl says this whole mess came about because of ill-advised posturing by the insurer and Miss Fiona’s unrealistic expectations about Kenyan corporate conduct in general and how insurance firms handle matters in particular. That is neither here nor there. However, I keep going back to Phillip last week because I still believe the buck stops with him.

He’s not alone, it is an open secret that garage work sanctioned by insurance companies almost always carries an inflated invoice as these businessmen try to eke out an extra buck where they can.

They believe it is a victimless crime since corporates are faceless capitalistic entities that thrive unfairly on the sweat of the Great Unwashed, so robbing them in return is only mutual treatment by way of negative feedback. The IT world calls it GIGO: garbage in, garbage out.

It didn't take long for the powers-that-be at these faceless corporates to cotton on to what was happening owing to the thinning out of their bottom line, and some were not backward about coming forward to plug the leak. Swift action was taken, action which resulted in insurance companies being among the most difficult entities to engage, as far as claims are concerned.

Remember my Mazda with its Sh7,000 windscreen that was invoiced at more than 400 percent of its actual cost? The greedy fingers behind that figure had hoped the bill would be footed by an unsuspecting underwriter but were only disappointed when an angry know-it-all summarily cancelled the job card and took his business somewhere more honest in a storm of front-drive wheelspin and thinly veiled threats.

This is the kind of thing that transforms insurance companies from endearing friends when they seek your business to cold-hearted, tight-fisted fiscal overlords when the time to pay claims comes a-knocking: fraud, and simplistic fraud at that. Simply adding zeroes to existing quotations is not only embezzlement, it is also an insult to the intelligence of the victim.

To curb this kind of behaviour, we now have assessors and investigators on the payroll of the insurance companies, foot soldiers tasked with establishing if matters at ground level match the numbers on the claims form. These individuals are the front line in the battle towards eliminating the soft extortion that garages have started practising.

The result is like Fiona's case. A push-and-pull, he-said-she-said scenario arises and detention is the order of the day - typically, it is the vehicle that is detained while the garage steadfastly holds its ground demanding its "rightful claim", honest or not, while the insurance company is equally steadfast in asking the client "Who told you to go there?". Phillip took things a notch higher by detaining both the vehicle and the people involved.

Since Fiona's case is not the first of its kind (if we overlook the kidnapping of lawyers), definitely steps have been taken by a number of insurance companies towards mitigating these types of standoffs. After all, if they don't curb them, they will lose their business to someone who will. Besides deploying an assessment and investigative infantry, they have also compiled an in-house list of garages they can engage because they trust them.

If you choose, in your wisdom, to take your vehicle elsewhere, you will become the new Fiona and may at the end have to foot your own repair costs should cooler heads not prevail in the resultant kerfuffle.

And it makes sense. These companies have responsibilities in two directions: they have to offer their clients peace of mind by reassuring them of their support when the undesirable occurs, but then again they also owe it to their masters not to leak money, least of all through embezzlement and fraudulent claims.

Earl exhorts insurance clients to be proactive in making claims, something I repeat here with insistence. Nobody is going to look for you to give you money, so as a claimant, saddle up, put your game face on and engage, engage, engage until they make good their promise to cover the damage costs they promised to do.

Part III: "Who Told You That?"

Earl also says "encourage the readers to choose their insurers wisely, read and understand their policies and the provisions therein". I call it reading the fine print, something people tend to overlook when signing contracts, only to end up getting burnt come crunch time. There are a lots of assumptions that people tend to make, generally in life and with some factors such as insurance, assumptions that have on many occasions put paid to any attempts at receiving compensation.

Of particular note is anything with the phrase "force majeure" attached to it. This basically means that the insurance company can weasel and finagle its way out of obligation under unusual circumstances.

Find out what these unusual circumstances are before signing because, courtesy of Fiona, more and more sagas are starting to see the light of day and I can now issue a spoiler alert for those deriving some kind of entertainment out of this new series: the next episode involves people I know, matatus and Covid-19, the disease caused by the novel coronavirus. You will want to read it.

I never imagined the contents of this column would one day read like the script of a soap opera, but well, here we are. Strange times, indeed.

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(Addendum: everybody and their regional assistant chief has a story to tell about the difficulties of making insurance claims, but since nature balances itself, I am also privy to many cases where the underwriters paid out claims promptly and without question. So, since many folks out there tend to misconstrue my articles on the regular, let me state this as unequivocally as I can: this article is most definitely NOT an attack against insurance companies nor is it trashing anybody.)