Hurricane insurance rates up sharply
Insurance is one of those things that you hate to purchase, but are extremely glad to find that when you really need it, it’s all paid up. That situation still holds, but the process is becoming more painful. Ann-Marie reports.
Ann-Marie Williams, Reporting
When it’s time to renew your insurance premium, Belizeans can expect to pay more money, thirty to forty percent more if you’re insured with Regent. According to Regent’s managing director Tony Flynn, the rise in premium is reflective of insurance market loses over the years.
Tony Flynn, Managing Dir., Regent Insurance
“The only was you can make that right is by putting up the premium and as the theory of insurance is the claims of the few are paid by the premiums of the many. That is an adjustment, so the first reason is worldwide losses. That’s made even worse by the fact that these losses have meant that the people who invest in insurance company shares haven’t got good yields and therefore they’ve taken their money out.”
Phil Gallaty Jr., underwriting manager for Nemwil agency in Belize says his customers will only pay anywhere from ten to fifteen percent increase depending on where you live.
Phil Gallaty Jr., Underwriting Manager, Nemwil Agency Bz.
“Coastal low-lying areas, Belize City, which is technically a at sea-level or below, areas that have a tendency to flood, lets look at the lower Carib basins, Sibun, River Valley, which are natural flood planes, there areas have always had more specific underwriting…for those specific risk. The islands, are more susceptible to sea surge.”
Ann-Marie Williams
“What’s the increase like for somebody who lives in San Pedro?”
Phil Gallaty
“It should be the same, about ten to twelve percent from our company’s point.’
Gallaty says the increase has nothing to do with Keith.
Phil Gallaty
“Where maybe last year there were ten major companies doing re-insurance in the hurricane area, there are now maybe five or four. And as a result there is a lot less capacity to go around, because whenever they take a risk, they place an actual dollar value and they reserve that money, because they expect to get claims. But then worldwide, the whole front is being hit from all over the world, cyclones on the Philippines, earthquakes in Japan, monsoons in Bangladesh; everybody is getting hit. The same companies are getting hit every month.
And if so many companies have discontinued catastrophic re-insurance and environmentalists have warmed of serious times ahead, Gallaty says the future looks dim.
Phil Gallaty
“It going to be worse. It will get to be who can afford it. And it’s a real bad situation for us because we have always…traditionally, our company and our family in here has been doing business for thirty-five years in insurance. The middle and low-income people have been the bulk of our insurance. Now re-insurers are telling us they don’t want to hear the word “would.”
Ann-Marie Williams
“What happens to a lot of people who as you say, have been buying insurance for a number of years and a lot of people who don’t have disposable income now?”
Phil Gallaty
“Very few of them would be able to afford insurance. It’s gonna be a very critical mass. Lower-income people, lets use the word poor people, who are have been taking good care of their properties, who have caused no problems in the past, no major claims, good risk, very good people, will not be able to have insurance.”
Ann-Marie Williams
“Storm deductibles have increased from two percent to as much as five percent. Where is that five percent effective?”
Tony Flynn
“The two percent has been maintained for the main land, private residences on the main land, maintain the two percent. The five percent only comes into play for the cayes and that is because that’s where the money is being paid off in Keith and Mitch.”
Ann-Marie Williams for News 5.
The consensus among those hard hit by Hurricane Keith is that Belize’s major insurance companies and their adjusters from abroad settled the vast majority of claims quickly and fairly.
