By YOURI KEMP
Tribune Business Reporter
The Bahamas Insurance Association (BIA) yesterday said there has been no "appreciable increase" in persons buying home insurance in the aftermath of Hurricane Dorian's $3.4bn economic blow.
Anton Sealey, the association's chairman, told Tribune Business: "I would not say that we have seen any appreciable increase in the take-up of home insurance coverage post-Dorian. There has been a limited number of individuals who, prior to Dorian, opted not to include hurricane as a part of their coverage and have now added that specific peril. However, there is not a significant amount doing so, particularly in the Family Islands.
"This, I think, is driven by economics more than anything else. As you can imagine reinsurers, following a loss of the magnitude of Dorian, found it necessary to increase premium rates and this poses a significant challenge to homeowners, particularly in the Family Islands. This has now been compounded with the current pandemic and the resultant effect on the Bahamian economy."
Last September, BIA director, Timothy Ingraham, said "anywhere from 40 percent to 50 percent of the persons in the [Dorian] affected areas are uninsured, and some 75 percent are underinsured". The credit ratings agency, Moody's, said 60 percent of homes damaged by Dorian were not fully insured.
Mr Sealey, though, added that second homeowners on Abaco were driving demand for contractor's all-risk insurance coverage as they began to rebuild and restore their properties in earnest post-Dorian. But, when it came to business interruption insurance, he said "there has not been the demand for this coverage that we would wish to see".
Patrick Ward, Bahamas First's president and chief executive, echoed Mr Sealey by saying: "What we have seen is an increase in the brand of business we call contractors all-risk cover, where principally clients are engaging contractors to do repairs or do replacements.
"So they buy what we call contractor's all-risk cover to facilitate the insurance requirements during the period until such time as the repairs are completed, and then it reverts back to a normal policy. We have seen quite a number of those policies, which would indicate that there is a significant amount of activity to rebuild or repair homes that would have been damaged in Abaco."
Mr Ward then added: "It is difficult to say that we have seen an increase (in business interruption insurance) because I think what has happened is, because a lot of businesses were shut under the COVID-19 orders or under the mandates of COVID-19 and not operating at full power, or didn't have employees available to operate their business, some of them have just basically shuttered their operations.
"So I think the demand for business insurance has been sort of dampened by the COVID-19 scenario more than anything else. Businesses that have to protect their properties will make sure that they have the appropriate cover, but on the other hand if you don't have any incoming revenue it might be difficult to do that. People are going to have to make a case-by-case judgment on that."
Urging the value of preparation, Mr Ward said "taking the extra precaution before the storm hits can make the recovery process go a lot smoother, and I think anyone that has lived through Hurricane Dorian will know the value of that".