AN INSURANCE EXECUTIVE is concerned about people who are underinsuring their properties.

"We have been carrying out surveys from January this year right through on our portfolio and we are collecting probably about 20 or 30 risks. There is a great degree of under insurance out there," said director of United Insurance, Andy Toppin, on Monday during a panel discussion.

"A lot of people insure their houses because they have to insure them because of mortgages and then they don't insure the contents. It's a serious situation, and when that happens what it means then is that the Government has a big social tab to pick up when a disaster comes through," he added.

The discussion formed part of a Barbados Chamber of Commerce and Industry forum on disaster preparedness entitled 2008 Hurricane Season – Are We Ready? at Sherbourne Conference Centre, Two Mile Hill, St Michael.

"Nobody likes to talk about this [underinsurance], but it is a fact of life. Previously I mentioned the degree of under insurance and there is a term or condition called an average clause in the policies; it is a universal condition. When we insure a property, the building, contents or whatever, unless otherwise agreed, we are not insuring piece of the building or piece of the company it is taken we are insuring the building, the contents.

"Some people may take the decision not to insure, well that's their prerogative, some people decide to under insure. Like the person who decides not to insure, if you under insure basically you are carrying a portion of that risk yourselves. When it comes to a claims situation then you are actually carrying a part of that loss in the same proportion to the under insurance. Sometimes this principle is misunderstood or ignored altogether until something happens and then it becomes a contentious area," Toppin told the audience.

He added that the General Insurance Association of Barbados had been running public relation ads, particularly during the hurricane season, to sensitise the public about being adequately insured and the consequences of under insurance.

The executive also said that even though the region had experienced hurricanes like Ivan in 2004 that caused catastrophic damage in Grenada, people were "still very complacent" although a lot were "more sensitive" to hurricane damage.

Toppin added that an individual's state of readiness or preparedness was not about "running out to the supermarket when you get a warning issued" but about contingency planning. (DS)