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No ‘last-minute’ insurance


No ‘last-minute’ insurance

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by Stacey RussellEVEN THOUGH the expectation of an active hurricane season is pushing some Barbadians to insure their properties, they are not pursuing home insurance in large enough numbers.  And some insurance companies have declared that they will not be undertaking underwriting immediately before peril hits the island.  Those were the main conclusions drawn from interviews conducted by BARBADOS BUSINESS AUTHORITY with insurance professionals last week.  Apart from one insurance broker who reported “a marked” increase in his home insurance portfolio, agents and insurance managers said the class of insurance was holding steady and reported some decreases in underwriting.
On Wednesday, Dominic Persad, senior broker at Sentry Insurance Brokers, said, “We usually find that around the commencement of the hurricane season, especially if there are news reports that the hurricane season is going to be relatively severe, persons who weren’t insured prior rush to insure their properties.”  He said he could account for an approximate 20 per cent increase on last year in that class of business, mainly for wall houses valued between $250 000 and $500 000.  “Once the option is offered of paying in instalments, they would take that option up,” Persad added.  However, David Alleyne, general manager of United Insurance Company Ltd, one of the major insurers here and in the Caribbean, said people never come forward in greater numbers for home insurance during the hurricane season.“That doesn’t happen. People may try to come and insure when there is a hurricane immediately off Barbados but apart from that, you would not see people coming to insure because the hurricane season started,” he said.
He noted that United Insurance did not offer coverage when a storm was brewing.  “You can’t come and insure because something is about to happen. The premium would be the sum insured, because you can’t come and insure when a peril is certain to happen or almost certain to happen. Insurance is about probability and chance. An insurance company is not going to insure you for a certain claim when the claim is definitely going to be more than the premium,” Alleyne stressed.  Business development manager and head of the underwriting department at Trident Insurance Company, John Herbert said on Wednesday there was no noted increase in Trident’s home insurance business.
He too pointed out that locals tended to rush for insurance coverage once a severe weather system was approaching Barbados, but granting coverage at that time was tantamount to “insuring a house that was on fire”.  Meanwhile, Harmony General Insurance Company underwriting supervisor Leandra Gibson said the home insurance portfolio there was stable, and whilst enquiries from potential customers were up, actual underwriting for that class of business was not on the incline.  And American Life Insurance Company agent Angela Evelyn, who also underwrites general insurance business for a brokerage house, indicated an average 20 per cent fewer new home insurance policies than in 2009.
“Sometimes it boils down to cost and if you can afford it at that time.  But I find that persons who are having properties insured are the ones who are mainly going for mortgages or might be using the house for collateral purposes,” she said.