Requiring motor vehicle buyers to pay insurance in advance for eight years is unreasonable and onerous, one that must be vigorously opposed by the consuming public, a former Insurance Commission chief said on Wednesday.
Former Insurance Commissioner Emmanuel Dooc said he read the news account and was aghast that some insurance providers require vehicle buyers of a particular make and type as taking advantage of its limited availability and for this reason extract its pound of flesh by imposing an unusual and probably an illegal requirement.
“That provision is onerous and unreasonable and because the matter is of urgent public interest, then the offended party need quickly to ask the regulator, the Insurance Commission, to rule on the matter,” Dooc said.
He acknowledged having read the news account of one insurance agent intending to buy a particular SUV brand and being told to pay vehicle insurance equivalent to eight years.
Dooc explained this was “unusual” for any motor vehicle insurance provider to require a multiyear advance payment as the normal contract lasts only a year although he also said some have been known to require up to two years.
Such is an unusual requirement given that should a contract be demanded on only the first day of the agreement, the insurance provider is mandated to pay the full premium.
Dooc said this mechanism may not be honored in an eight-year contract should one be asked on day-one of the contract.
“This has happened and the insurer is duty-bound to honor the contract,” Dooc said.
Published accounts related of a potential vehicle buyer who was scandalized he was asked to pay not only the cost of the vehicle he purchased in advance of its release date but also its insurance.