Insurance companies explain some misconceptions
An insurance policy is something that you usually don’t think about until you need it. And when you need it, it’s usually too late to go out and buy it. In the wake of Hurricane Keith many people who hadn’t looked at their insurance policies since Greta in 1978, discovered that in the new millennium insurance is a whole new ballgame.
Ann-Marie Williams, Reporting
Belizeans generally buy insurance, but when it’s time to make a claim, what they claim they should receive usually differs from the reality as stated in their policy.
Phill Gallaty manager of Bryant/Nemwil attributes that to policyholders under insuring their property.
Phill Gallaty, Manager, Bryant/Nemwil
“You need to insure it for its full value. Whatever you do not insure, you are keeping the risk yourself. When the time comes to pay, let’s say half the building is damaged, the insurance company will pay half the claim… well the percentage of insurance you have. Using a round figure of a one hundred thousand dollar building and having fifty thousand dollars insurance, you get a fifty thousand dollar claim, then the insurance will pay twenty-five thousand dollars and you will pay the other twenty-five because that’s the part you have kept for yourself, that you have not paid the insurance company for.”
Gallaty says that this is a serious situation especially with buildings built long ago.
Phill Gallaty
“You could have built a building in the 1970’s with 1970 dollar (value) and say for fifty-thousand dollars, it would have been a very nice house in that time. That same house could cost you two hundred thousand dollars today, so your building has technically appreciated four times and you have to keep up its value.”
Regent’s Managing Director Anthony Flynn notes that his clients were aware of the two percent deductible imposed on them in 1993.
Anthony Flynn, Managing Director, Regent Insurance
“It stressed that one: The two percent deductible was imposed on us, that we were not the authors of it. Secondly, it said please make sure you’re summed assured and on a correct indemnity basis. It also had a little coupon to redo your summed assured on, but that was in ’92. After Mitch I wrote everybody a letter saying “Following Hurricane Mitch, I noticed a lot of you were underinsured and by the way I’ve managed to get you a better deal on your deductible.”
“Say the building has damages of fifty thousand dollars, we will pay forty-eight thousand, you will pay two thousand. If there is flooding as a consequence of the hurricane, it is paid for under that cover. There’s another peril available, which is flood. That costs a little extra money and does not require a hurricane for you to make a claim.”
Phill Gallaty
“If you should lose something major, let’s say a refrigerator, freezer, your dining set or even a sofa set, it can put you out several thousand dollars. People do not realize what it takes. Take yourself, you go out dressed to work, you have sets of clothes; those things cost quite a lot of money. As they go through the years it depreciates, but generally speaking you have an image to keep up. People that work in banks, uniforms, things like these cost a lot of money. People don’t realize what they have in their houses and in their draws and in their closets. They do not realize what it would take if they should just lose say room.”
“It’s a very difficult situation. One of the things we caution people on, when they are being advised on this is that quite often we tell people you’re under insured and they say “Well, whatever little I can get it doesn’t matter,” and that’s how they look at it. Some people refuse to appreciate their property from the 1960’s.”
Ann-Marie Williams for News Five.
Both Gallaty and Flynn urge policy holders to consider their needs carefully each year and update the replacement value of their homes and belongings.
