With two months to go before the official end of the 2022 Atlantic hurricane season, a leading insurance executive is again raising concerns about the absence of insurance on some properties and the insufficient coverage on others.
President of the General Insurance Association of Barbados (GIAB) Randy Graham said both scenarios spell trouble for homeowners when disaster strikes. Similarly, owners of vehicles covered only by third party insurance will also be faced with no insurance to fall back on in the aftermath of some unexpected weather or other event.
On a positive note, Graham said current insurance rates are stable at the moment and there is nothing to indicate they will be going up this year. “I don’t know that they will be. There is nothing yet from the season itself to create a reason for any immediate increases. The rates in Barbados have been reasonable in spite of what the public may think. We haven’t seen any material increases in the rates in the last few years and don’t see that this season as it currently stands, will cause any increases. So you probably won’t see any significant increases in the premiums right now,” the GIAB head disclosed in an interview with Barbados TODAY.
However, the news is not comforting for those whose vehicles are covered by third-party insurance or whose residential properties are under-insured, particularly in the midst of the hurricane season. “To be honest with you, the biggest thing that we keep concerning ourselves with is the number of houses in the country that don’t carry insurance. Even the ones that have insurance they are carrying them at the value for when they originally built or purchased the house
The value they are insured for doesn’t take account for inflation and they don’t take account for increases in rebuilding costs,” he explained.
“What we have seen after hurricanes unfortunately is that even when the policy is paid, what the clients have the house insured for is not enough to rebuild the house after the damage. In circumstances where you don’t have enough people in the country having bought property insurance to start with, or those who have it, don’t have enough cover, we are back in this vicious cycle of asking government to step in as a lender of last resort for households,” the insurance executive pointed out.
Graham said if many more people were to buy insurance, 90 per cent of the buildings in Barbados would be repaired through insurance companies after storm damage and the government would not have to intervene.
“Our concern is that we are not yet at that level. Too many houses are still not insured or don’t carry enough insurance,” he stated. Graham also said that it hurts when insurance officials have to see the damage after the storms and realise that some people cannot rebuild their homes due to inadequate or no insurance.
“It’s a drag when we see these things happening and you can’t do anything to improve the situation. Socially, we always try to look for ways to improve it, but it is difficult if we are not yet at the level where people are seeing insurance as a necessary purchase. So after the hurricane, we can’t respond in the way that we would want to because there is not enough insurance being bought,” the insurance industry leader contended.
Regarding insurance on motor vehicles, Graham said comprehensive coverage is alway the better option.
“The fortunate thing is if you have comprehensive motor insurance on your car and it gets damaged…we see it often when objects fall on the vehicle or there is flooding after hurricanes, they will be covered. The policy will cover you for that. If you have third-party cover though, the third-party cover does not cover your vehicle. It only covers if you hit somebody else [in a road accident].
emmanueljoseph@barbadostoday.bb
