EDITORIAL: Safeguard your investment
How many times have you heard of a house fire and the reports in the media indicate that house was not insured? Regrettably, this is too often the reality in this country and it is imperative that something is done to encourage Barbadians to insure their investment. And indeed it is an investment, and one of the best that a person can make with their hard earned money.
When disaster like a fire or a hurricane strikes, and a house is partially, or even worse, completely destroyed and a person is not able to recoup their losses, it is no different to literally throwing money down the drain or setting fire to it. Certainly this is not the first time we have sought to raise the issue of the importance of attaining home insurance, but recent calls by the Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss, for persons to take insurance coverage seriously, has reignited our resolve to get fellow Barbadians to take not take the matter of insurance coverage lightly.
Indeed then, we support the Minister’s call for a national conversation on the issue, and for Government and the general insurance industry to collaborate to educate persons about the risks posed to their families, by refusing to insure that most valuable possession. Too often the argument is that they cannot afford it, but how could the cost of homeowners insurance, possibly compare to rebuilding a home lost to fire or some form of natural disaster? In his presentation to the Annual General Meeting of the General Insurance Association of Barbados last week, Minister Inniss was at pains to point out that persons would spend money on expensive shoes, clothes and accessories, pay hundreds of dollars a month on cellphone bills, but not pay a couple thousand dollars a year to safeguard their home. It is ridiculous!
Now, we are not for one moment saying that for some, homeowners insurance may not be a major expense, especially given the current economic environment, but it is better to be safe, than sorry. What’s more, while the insurance rates could be a bit steep for the less fortunate, the sector has recognised that and has sought to not only offer competitive rates, but allow persons to make their payments in several instalments, as much as 10 month payments in some cases. Indications from the industry suggest that for a house valued at $200,000 the payment could be between $800 and $1000 dollars a year, divide that by 10 months and a person could pay as little as $80 per month. This move on the part of the industry, allows persons to put aside a little every month to safeguard their homes and ensure peace of mind, and no Barbadian homeowner should pass it up.
The importance of having a home insurance policy cannot be overemphasised, for one never knows when disaster will strike, and in the event that a house is damaged and it is uninsured, the burden is then placed on the State, through the taxpayers, to make provisions for the victims. Given that reality, we think it necessary that a survey is done, by Government and the industry, on the housing stock to determine how many of the houses that exist are insured. This may help Government to decide whether homeowners insurance will have to be mandatory, as is the case with motor insurance. Admittedly, we know that there are some who will not embrace this idea, but sometimes tough decisions have to be taken for the greater good.
Government in that survey should also look at whether insurance coverage declined after home insurance was removed as an allowance for income tax purposes. It would be good if such a survey could be conducted in the next few weeks, ahead of the Budget promised sometime next month, so that if there has been a fall off in coverage they can seek to remedy the situation.