EDITORIAL - Invest in homeowners insurance
Buying or building a home costs money and outfitting that home with furnishings costs as well. For an investment as large as a home, it makes good financial sense to get homeowners insurance to protect that investment and give you a sense of security. But while this is a known fact, there are still many houses across the length and breadth of our nation which remain uninsured.
Some persons who choose not to buy an insurance policy do so because they think insurance is a gimmick and others think it is too expensive. So often we hear it said that they cannot afford it, but would not having to rebuild an uninsured home from scratch be more costly than paying for an insurance policy? The fact is that without homeowners insurance, a person stands to lose thousands of dollars and has absolutely no way to recoup their investment. One might think that possibility is enough to make all Barbadian homeowners obtain homeowners insurance, but alas it is not.
Admittedly, home insurance can be a major expense and given the economic conditions being experienced in this country over the last few years, persons may be inclined to drop that expense and pray for the best. Now we saw the damage caused to our neighbouring islands during the recent hurricane season, it is clear that more than prayer is needed to safeguard our investments against Mother Nature. So it is better to be safe than sorry and so persons who cannot afford their premiums in a lump sum, should speak with their insurance company about paying it in flexible instalments. With some local insurance companies offering as much as 10 and 12 months to pay off premiums, persons can put aside a little every month to safeguard their homes and ensure peace of mind.
We therefore urge local insurance sector stakeholders to make this reality known to their customers, especially given that the costs of premiums are expected to rise on account of the very active hurricane season we had this year. The fact is, higher premiums could have persons questioning whether they will keep their properties insured. But we should learn from the experiences of neighbouring countries like hurricane-ravaged Dominica and Barbuda who now have to rebuild. Could you imagine such devastation in Barbados and the impact it would have if even a small percentage of the homes were uninsured?
No one can predict if or when something tragic will happen to their home, so the importance of having a home insurance policy cannot be over emphasised. The reality is that if a person loses their home and it is uninsured, the burden falls on the State to make provisions for them – a burden that is borne by the taxpayers and that is simply not fair.
Government may well have to consider making homeowners insurance mandatory so as to ensure that persons are not reneging on their responsibilities. But given also the fact that Government has a social responsibility to assist the people, perhaps some thought should be given to subsidising homeowners insurance for persons who truly cannot afford it, or to reintroducing home insurance as an allowance under Income Tax for everyone. While offering such concessions or allowances could cost Government through the Barbados Revenue Authority quite a bit at the end of the day, we think it is an investment worth making.
We think also that Government and the insurance industry must work hand in hand to encourage more persons to secure insurance policies for their own good and the good of our country.