Insurance companies taking a hit from road accident claims

INSURANCE companies are paying out a massive Bds$21 million dollars in claims annually as a result of road accidents, the majority of which are caused by distracted driving.

According to the President of the General Insurance Association of Barbados (GIAB), Michael Holder, statistics collected in 2014 show that approximately 38 per cent of road accidents were caused by some level of distracted driving.

Holder said while it is recognised that there are about 8 000 road accidents annually, essentially around 3 000 of those accidents occur as a result of distracted driving.

The President addressed the concern as he delivered remarks at the Barbados Road Safety Association’s town hall meeting on the Amended Road Traffic Act, held at the Princess Margaret Secondary School.

“Now 3 000 accidents, that is a lot of accidents, and when that research also told us that for every accident on average the insurance companies are paying out Bds$7000, Bds$7000 by 3000 is quite a bit of change.

“So it is in our interest to assist with this matter, as we seek to reduce both the number of minor accidents, the number of major accidents, and more importantly the number of accidents where there is loss of life,” he said.

In addition, Holder also revealed that research has shown that around 2 000 vehicular accidents take place in car parks.

“Now we have had cases of suspected drink driving. We have to say suspected because obviously there is more testing that can be carried out. But those persons on the scene, when they speak of the persons behaviour, how they were acting, how they were walking, the smell of alcohol, it points to this person was impaired in their driving because of drinking,” he said.

Holder explained that ultimately, when the number of road accidents rise, the reality stands that there will be a resultant cost to the insuring public.

“So, the more accidents we have, eventually you may find that your premium can be increased. On the other hand, you will expect that where the number of accidents are reduced, and the cost is reduced, then your premium in turn should also reduce,” Holder said.

“So as road users, as the insuring public, there is essentially a vested interest in making sure that the number of accidents are reduced because in doing so, your premium is reduced. So even though you yourself may not have an accident, because other road users are having accidents, you may very well find that there are times when your insurance company may say to you, yes, ‘well you were not in an accident, but because of the overall claims cost, we have had to take up your premium a little bit,” he further explained. (AH)