AS we continue looking at third party claims today, we tackle the issue of how much a road accident victim should be paid after submitting all the necessary documents discussed last week.
First of all, any claim by a victim will normally have a demand letter.
This is the amount which the victim is claiming as compensation.
I must admit that this is a subjective matter, it is not an exact science and brings in the issue of negotiation skills but for now let’s look at it from the technical side i.e. how the victim comes up with an amount to claim or should they just shoot in the dark?
Normally one aspect to look at is the economic condition of the victim. It is unreasonable for someone to claim say K30,000 if their economic situation does not suggest so, although one may argue of future prospects.
This entails the need for realism as opposed to taking advantage of an insurance claim to make unrealistic demands. It even makes much more sense to negotiate a realistic and reasonable figure even if there can be no figure that equates to human life.
In the case of Zampost (a case which was in the public domain), there were claims as high as K1 billion (old currency) per person which apparently was the aggregate limit on the policy. It is difficult to negotiate such figures.
Suffice it to state that, in death claims, a full policy limit per person can be claimed.
The other issue which is very key is the degree of disablement. If someone loses his limbs, it means he will not be able to carry on with their day to day work.
This is different from someone who only injures say their finger. They may be able to continue with their normal duties be it at a reduced rate.
The reduction in the routine duties can be a good ground for making a realistic figure.
Medical expenses are another aspect that should be considered by the victim. Whatever they spent can be put together in form of receipts and seek a refund.
Other factors that may be considered are pain and suffering, depression, age and life expectancy etc. provided they can be reasonably justified.
Well, whatever the figure which the victim comes up with, the insurer will then have to engage them to reach consensus of the amount that can be paid.
On a more technical aspect, there are some established methods recognised by law that help ascertain the amounts to be paid.
This is usually considered if the amount claimed is outrageous. If someone is claiming K5,000 and the established figure is say K15,000, the insurer will not go into any negotiations but will simply pay off that amount and the case ends.
However, if someone claims say K20,000 with only some bruises and was confined to the bed for say a week, insurers will fall on these established methods.
Of these parameters, today I will look at John Munkman’s book “Damages for Personal Injuries and Death, 10th Edition, 1996”. It is a book which the courts may use to ascertain damages.
There is a popular case of Reuben Nkomanga vs Dar Farms SCZ Judgement Number 25 of 2006 Appeal Number 88 of 2004 in which the Supreme Court relied on this book in determining awards for damages for personal injury.
This means that if the insurer and the victim fail to agree and they go to court as a last resort then the courts will use the Munkman’s guidelines in ascertaining what must be paid to the victim.
Insurers, therefore, should use these guidelines as a basis to ascertain settlement figures. The method is well described and it would be in the interest of the claimant to know the same.
Again insurers should not take advantage of the ignorance of people to avoid paying equitable figures.
I must mention that before a payment is done there is a form prepared by the insurer known as the discharge.
By signing this discharge the claimant commits to forever discharge the insurer and the insured of any liability present and future relating to that accident. It must therefore be signed with clear understanding of the settlement amount and its implications.
Comments: webster@picz.co.zm or webster_tj@hotmail.com or on face book search for Insurance Talk-Zambia page or call/text 0977 857 055
(The author is a chartered insurer with twelve years industry experience)