As the country braces for another possible impact by a hurricane, Deputy Prime Minister and Minister of Finance Peter Turnquest said the government is looking at ways to increase the participation of residents in some form of insurance, particularly catastrophic hurricane insurance.
One of those ways, Turnquest said, could possibly be in the form of reduced property taxes for property owners that purchase insurance.
“Looking at, for instance, if we were to reduce real property tax, if we were to give some kind of concession or some kind of incentive by reducing real property tax, would people be willing to take up the insurance as the incentive,” he told Guardian Business.
“Because while it will reduce real property tax revenue, on the flip side it will be reducing our exposure. So just looking at things like this to see how we can create some kind of fund or some kind of risk transference, that will help us in the long run.”
In recent policy recommendations to the government, the International Monetary Fund (IMF) stated that steps should be taken to enhance resilience to natural disasters by putting in place mandatory hurricane insurance.
While Turnquest said a similar type of initiative has been on the government’s agenda for some two years now, the recent devastation caused by Hurricane Dorian last September has made it a priority.
“Because as you know presently a lot of persons are not insured or they’re underinsured for one reason or the other, primarily the cost of the insurance. We’ve been trying to devise some method that we may be able to encourage residents to take up insurance, at least for catastrophic risk and thereby relieve the government of that liability, which is significant exposure for the government in terms of unplanned costs,” he said.
“As you know for Dorian, for instance, our supplemental budget was over $100 million. That’s not money that we would have had planned or that we had sitting around. That is money that we had to find, and so to the extent that we can shift that liability to the private sector, that is something that we want to encourage. We’ve been looking at a number of proposals to do that.”
It was estimated that 80 percent of the houses in Marsh Harbour, Abaco – one of the areas hardest hit by Dorian – were not insured or underinsured.