VAT removal from insurance premiums has not translated into more insurance business
The government’s removal of value-added tax (VAT) from insurance premiums has not translated into more insurance business, several insurance company executives said yesterday, adding that homeowners also now need to ensure that they are not underinsured.
Managing Director of NUA Insurance Agents & Brokers and Chairman of the Bahamas Insurance Association Warren Rolle added that it is also likely that Bahamians are still economically challenged and therefore have simply opted out of purchasing insurance for their homes despite the risk of hurricanes.
Rolle said the increase in VAT from 7.5 percent to 12 percent last year means home insurance coverage has to reflect the building cost of the home in case of damage. He said claims costs have now increased.
“Your home is the largest single investment that any of us will make, and a lot of us do not have the funds available to replace the home in the event of a disaster,” Rolle said. “So this is where insurance comes into play. It is definitely an important risk transfer mechanism for most customers.”
He added that individual insurance companies have been doing their normal advertising to educate their customers and potential customers on the need to insure their homes.
Managing Director of Summit Insurance Timothy Ingraham said his company has been sending out notices to customers to re-evaluate their current rate of insurance in case loss is incurred in a hurricane.
“Each year building costs are increasing,” said Ingraham. “There is always something driving the cost of insurance up.”
Education: Florida International University, BS in Journalism
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