Motor vehicles insurance and third party risks

An insurance policy in the context of motor vehicles is a personal contract between the parties for indemnifying the insured in case of an accident covered under the policy. The law of accident claims is fast growing and the amendments to suit the requirement of the object must be necessitated.{{more}}

The Motor Vehicles Insurance (Third Party Risks) Act No. 4 of 2003 repealed the Motor Vehicles Insurance (Third Party Risks) Act Chapter 356 of the Laws of Saint Vincent and the Grenadines Revised Edition1990. Section 3 of the legislation outlines the intention of the legislation, which is to ensure that, “No person shall use or cause or permit any other person to use a motor vehicle on a public road unless there is in force in relation to the person using the vehicle, a policy of insurance in respect of third-party risks”.

A general definition of “third party” in this situation means any person to whom the insured may be liable for death or bodily injury or damage to property caused by or arising out of his use of a motor vehicle on a public road, save and except those persons expressly excluded from coverage under the law.

Developments throughout the years created a need for a complete review of the 1949 legislation embodied in Chapter 356. Today there are more vehicles, roads, and pedestrians. This has placed third parties at greater risk. In other words, the probability that a citizen may be subjected to a motor vehicular accident has increased tremendously over the years. Further, with increases in cost of living globally, inflation in the cost for medical care, and the opportunity to access higher levels of medical care, this has dictated the need for a commensurate increase in compensation for personal injuries, or to beneficiaries in cases of death and in instances of damage to property.

Hence, section four of the legislation is in touch with reality when it reflects a clear increase in the value of the compensation being offered to third parties, when compared to the previous legislation. Under the new legislation, the policy of insurance that is issued by an insurer, in accordance with the Act, shall insure a person or categories of persons specified in the policy against liability for such death or bodily injury in respect of any sum not exceeding two hundred and fifty thousand dollars, arising out of any one claim by any one person. That is in one claim in one accident. Under previous legislation, that person would only be able to receive ten thousand dollars.

Further, in a multiplicity of claims in relation to one accident, one can receive up to one million dollars. Under previous legislation, that person would only be able to receive a maximum of twenty thousand dollars. The intention of the legislation is to provide just compensation. This should always be kept in mind.

One of the main implications for the insurance industry is that there is a forecast for increases in insurance premiums. It is, however, not farfetched to envisage that the competitive insurance environment would ensure that premiums are not raised exorbitantly.

The onus is now on all road users to ensure an extremely high degree of care on our nation’s roads. In so doing, the following advice may make for well. Making or receiving a call, even using a hands-free phone, can distract your attention from driving and could lead to an accident. In a collision, an unbelted rear seat passenger can kill or seriously injure the driver or a front seat passenger. This stresses the need to use our seat belts at all times. Any alcohol, even a small amount, can impair your driving, so to be a safe driver, one must not drink and drive.

The statistics have proven that at 35mph you are twice as likely to kill someone you hit as at 30mph. Your speed must always be in check. On the issue of children as pedestrians, children often act impulsively, so we must take extra care when driving in the vicinity of schools, and near school buses.

Tiredness is thought to be a major factor in road accidents. It is, therefore, advised that at least a fifteen minute break is important after every two hours on a long journey. When crossing a road, always use a pedestrian crossing if there is one nearby. Help others to see you by wearing fluorescent or reflective clothing in poor light conditions, especially for persons using the roads for physical exercise. Finally, one must observe and anticipate other road users.

For 2008 we must make our road a safer place to be.