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Editorial: Casting Doubt On The Value Of Insurance

IN the wake of Hurricane Dorian, the government announced its plans for financial assistance for people whose uninsured homes had been damaged by the storm. But for those affected, this was no pay day – the sums being paid out were such that they were a little help in the pocket, not a chance to rebuild completely.

There was $2,500 for those with minimal damage, $5,000 for medium damage, $7,500 for major and $10,000 if your house was totally destroyed. If your home has been wiped out, then of course $10,000 wasn’t going to go very far in helping you back on your feet.

Then again, this was a compensation to help those without insurance. After all, if the government covered the whole cost of repairs, that would be a large burden on the taxpayer and it would put the insurance companies out of business, right?

So for those who did pay out regular premiums to insurance companies, they could expect a significantly better payout as recompense for the damage their homes suffered. After all, they’ve paid their money to cover for these situations.

That might be the case elsewhere – but as the story on the front page of today’s Tribune reveals, not everyone feels they are being treated fairly.

Lawsuits are being filed on behalf of four clients – one of whom was reportedly offered just $6,067.46 for damage estimated at $39,000. Another case sees an offer of just 16.67 percent of the insured amount – a payout of $15,000.

The court will of course rule on such matters – the case is to be heard on Friday – but if this is a numbers game, payouts of $6,000 or $15,000 for those who have paid out money for insurance aren’t that different from payouts of $5,000 or $10,000 for those without. Where is the incentive to buy insurance if you aren’t going to get a payout when you need it?

Obviously this is just a snapshot of these disputed cases, but it’s only last month that one insurer made the call for all homes and businesses to have mandatory insurance. Imagine being in the position where you’re compelled to pay extra for insurance but still not having value delivered from it when you get a payout.

Insurers have to get the balance right. We don’t know the details of these cases – that’s for the courts to decide - but they need to be careful to make sure the payouts are appropriate.

The government safety net is there to catch people who haven’t been able to make provision otherwise – it shouldn’t be close enough to insurance payouts that people start to depend on it rather than making their own arrangements.

Cemetery planning mess

How has this mess at Woodlawn Gardens Cemetery come about?

Without any approvals given – or even pending – the cul de sacs around it have been opened up to allow funeral traffic to attend burials at the site.

Woodlawn has seemingly built a perimeter road around its border and the other roads are being opened up to give access.

Local residents are understandably angry at this going ahead without planning approval, Minister of Works Desmond Bannister has pledged to “act as quickly as possible” in response and says the government won’t allow the cul de sacs to be opened up. While the Town Planning Committee is going to hold a hearing to allow each site to state their cases? Each side? If there’s no planning approval, what side does the cemetery have except for apologising, promising not to do it again and hoping they don’t get prosecuted?

The opened-up roads need to be closed off again promptly, and funeral traffic needs to stop being directed to use streets to park in that shouldn’t have access without approval.

It doesn’t matter who has carried out this action – if construction or changing of road access is allowed without approval, anyone can go right ahead and build what they like without consequence.

This needs to be put right now – before the courts order the cemetery to put it right.

Comments

The_Oracle 2 weeks, 6 days ago

Anytime you have a 3 way contract, someone loses. Medical Insurance is a good case in point. Hurricane Insurance is another. Insurers, re-insurers, carriers and agents. Let's not forget adjusters. But what else can you expect from an unregulated industry. Meanwhile it appears Government insures nothing. That inspires confidence.

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Porcupine 2 weeks, 6 days ago

Insurance is an extractive business that is like many other businesses now. All about short term profits. Insurance companies make their money by denying health care, paying out less than they should and finding loopholes whereby they don't pat at all.

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empathy 2 weeks, 6 days ago

Two very good and timely topics. And great points made that I can easily support.

“Insurance companies almost always win”...something my grandfather said to me many moons ago. We do need economically healthy third party insurance companies whose business model sits on firm ethical foundations. However businesses rarely do this without strong incorruptible government oversight. We would benefit from educational training of our population concerning the value, best practices and pitfalls in the insurance market, much like insurance professionals provide to their friends, family and best customers...

As for graveyards, Bahamians will eventually have to give up their fascination with “burials” and embrace more environmentally friendly options in the future. We are running out of valuable high ground on this island, as storm hit residents of Grand Bahama and Abaco can attest.

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sheeprunner12 2 weeks, 6 days ago

If the insurance companies are reluctant to pay out their customers …….. why increase the rates for the 2021 cycle by another 15%?????? ……..... GREED????????

Who owns these local insurance subsidiaries of the OECD parent companies?????

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themessenger 2 weeks, 6 days ago

The other thing people are overlooking is the dangerous precedent being set by the government by paying out taxpayer money for the reconstruction of private property.

This is the same bailout the people in Ragged Island have been hollering for and which was denied the people of Exuma, Long Island and many others of our southern islands following hurricane Joachin.

The governments' responsibility is to rebuild public infrastructure not to subsidize the rebuilding of private homes and properties. Now that they have opened this bottle it would be interesting to see how they get the genie back in.

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sheeprunner12 2 weeks, 6 days ago

The difference is that Abaco and GB account for 7 FNM seats while Long Island (FNM) and MICAL (PLP) and Exuma/RI (PLP) was only 3 seats in 2016 ……… its all about elections and petty politics.

Perry dem was too busy giving out the "cheese" to their cronies ……. same thing during Hurricane Matthew …….. Shane was the hurricane czar, right????????

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DonAnthony 2 weeks, 6 days ago

Excellent point. This is moral hazard, why pay for insurance if the government is going to pay to help rebuild your house? This is not the role of government and we can not afford afford it, every dollar given away like this has to be paid for with interest. It is simply unsustainable. Most of these person will take these funds and rebuild in the same way, on the same flood prone land and next storm we will be right back where we started except the national debt has increased.

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John 2 weeks, 6 days ago

‘Novel coronavirus symptoms seem to be mostly focused on fever and cough, but gastrointestinal symptoms should be a new focus for clinicians, according to 2 new papers published online in Gastroenterology.

The first paper describes how investigators from Shanghai, China, sought to document the symptoms of the novel coronavirus. Although fever, dry cough, and dyspnea present in most cases, they wanted to understand what impact the virus had on symptoms such as diarrhea, nausea, vomiting, and abdominal discomfort. So far, those symptoms have varied among different study populations, the authors wrote.

Former studies on SARS, which is related to the coronavirus and can present with similar symptoms, showed that SARS was verified in patients after detection in biopsy specimens and stool. This was true even after the patients had been discharged from the hospitaL’. In many highly infected areas the great demand is for toilet paper and the CDC suspects the virus is being spread more rapidly through infected paper money. Persons who have no symptoms or mild symptoms using the toilet and not practicing safe hygiene.

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DDK 2 weeks, 6 days ago

A littler bit of socialism?

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themessenger 2 weeks, 6 days ago

Ah yes, DDK, But as one or two famous politicians have said before that ours never stop to consider is that "Sooner or later you run out of other people's money to spend".

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