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Puerto Rico Consumer Affairs issues insurer information requirements

By on January 31, 2018

SAN JUAN – Puerto Rico Consumer Affairs Secretary Michael Pierluisi announced Wednesday that his department began the process to issue orders on information requirements to all insurers on the island, to prevent fraud in the purchase of motor vehicles flooded during hurricanes Irma and Maria.

Insurance companies have until Feb. 21 to inform the Consumer Affairs Department (DACO by its Spanish acronym) if, as of the passage of hurricanes across Puerto Rico in September, they have “received and/or processed” claims from one of their policyholders involving motor vehicles that have been totally or partially flooded.

If so, they must present a list of the vehicles that were affected totally or partially by flooding, including the brand, model, year, license plate, serial number, type of damage (total or partial) and the insurer’s determination.

DACO Secretary Michael Pierluisi indicated that insurers that do not partake in the information requirement process will be subject to a $10,000 fine. (Jaime Rivera/CB)

“It has been brought to the department’s attention that, after being affected by the floods caused by hurricanes Irma and Maria in Puerto Rico, a number of motor vehicles were declared a total loss. To date, the government of Puerto Rico does not know the whereabouts of the vehicles affected by the floods. This not only could imply a situation of fraud for a consumer who acquires one of these vehicles without knowing it was flooded, but in addition could result in a matter of public safety,” reads the information requirement.

“Considering the aforementioned, it is imperative to investigate how many claims have been filed with insurance companies in Puerto Rico that involved vehicles flooded as a result of the passage of hurricanes Irma and/or Maria on the island. This way, we will be able to identify those vehicles and have the list available for the public’s inspection,” it adds.

Last November, Pierluisi issued an interpretative order that concluded the vendor of a used motor vehicle is compelled to inform the consumer that the vehicle for sale was flooded. The notification must be verbal and written.

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“We are of the opinion that the impacted concept–as used in Rule 30.2–is broad enough that it includes floods a vehicle endured prior to its sale,” Pierluisi said.

The rule is contained in the Regulation of Motor Vehicle Warranties, which has the purpose of protecting consumers and their investments during the purchase of motor vehicles, guaranteeing life and property, and preventing illicit practices in motor vehicle sales in Puerto Rico.

Failing to comply with the information requirement entails a $10,000 fine.

 

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