Property owners losing out due to under-insurance
Some homeowners have been losing out on insurance claims because they under-insure their properties.
General Manager at Co-operators General Insurance Company Ltd, Anton Lovell says this is a major issue in Barbados and is warning that the practice is not good.
He was at the time contributing to the St. James Central District Emergency Organisation (DEO) panel discussion “How to Build Community Resilience to Disasters likely to impact St. James”, held in collaboration with the Department of Emergency Management (DEM), Coastal Zone Management
Unit, and Co-operators General Insurance at Queen’s College on Sunday evening.
“Firstly, some people don’t want to insure and when they do, they insure for half the value, one-third of the value, etc.,” he pointed out.
Using the example of the 2017 Hurricane Season which devastated some neighbouring islands, he revealed that the main problem insurers met was that of underinsurance. Therefore, the insurance premium paid was not representative of the actual risk.
“The replacement value for properties could have been $500 000 people had insured for $200 000 or even $100 000. This means when you get your settlement from the insurance companies, they will give the $100 000 or $200 000 – less the deductible, but then you can’t build back your half million-dollar house… People that had homes valued at $200,000 had the homes insured for S50 000 or $100 000. And again sadly, when they received the compensation from the insurance companies they couldn’t rebuild,” it was explained.
He further emphasised, “Please don’t tell me about the premium. When you check the financial statements of nearly all the insurance companies in Barbados, not because of the hurricanes, but because of the motor claims – losses and losses – insurance companies trying to keep the premiums as they are or even lower, so that people will avail themselves of policies and to our detriment because we are in fact making no money as far as general insurance companies are concerned.”
“And then people previously paid premiums in two or three months, premiums are now spread six or eight months just to ensure that you get your properties insured. So, flexible terms, reduced premiums – there is no excuse really for persons not to have insurance,” he asserted.
Lovell also urged homeowners not to wait until the hurricane season to think insurance, “You can not wait until a weather system is approaching to then rush to an insurance company to affect a policy. We know Barbados is in the hurricane zone and even before the start of the season – June 1 – persons should get policies in place; renew and keep them up -to-date.” (TL)