The Bahamas needs public policy to cause Bahamians to have a higher uptake of insurance coverage for their properties, Governor of The Central Bank of The Bahamas (CBOB) John Rolle said yesterday, explaining that if Bahamians rely on public subsidies for home repair following a natural disaster, they will likely be left unsatisfied with the level of restoration of their properties.
Rolle, who was a speaker at yesterday’s Bahamas Business Outlook at Baha Mar resort, explained that most properties that are still under mortgage are required to have insurance coverage, but added that after those mortgages are paid off, anecdotal evidence suggests insurance coverage is dropped.
According to Rolle, property insurance coverage must be understood as part of the cost of ownership and should not be neglected simply because of the high cost of insurance.
“One cannot continue to ignore the insurance costs in making such investments,” he said.
Rolle said in the context of Hurricane Dorian and the resultant damage to homes and property, many homes were found to be uninsured or underinsured. He added that the owners of those properties, if they are without insurance or appropriate financial buffers, will have to look to taxpayers for the repair of their properties.
He contended that a governmental bailout is not likely to be enough to fully restore a badly damaged home.
“Reliance on a fiscal bailout will not on average address losses,” he said.
“Public policy has to cause a higher rate of insurance coverage take-up to be realized.”
A move to almost force property owners to have insurance, according to Rolle, will be necessary to protect taxpayers after devastating storms, because “some families are not going to be voluntarily disciplined to purchase insurance”.