Many homes on Abaco destroyed by Hurricane Dorian that were found to be uninsured, were uninsured by choice, President of Summit Insurance Company Timothy Ingraham said yesterday, revealing that reinsurers are now questioning whether some risk in The Bahamas is even worth their risk.
Ingraham, who was the guest speaker at a Bahamian Contractors’ Association’s luncheon, said there were million-dollar houses on Abaco that were uninsured because the owners thought they were constructed to withstand just about any storm.
“Some of the owners were millionaires, but they felt that they constructed their house to a standard that could take most storms, so they didn’t feel they needed to spend on insurance that way, so they didn’t insure,” Ingraham said.
“It’s not always a case of can’t afford to insure, sometimes it’s a case of ‘I don’t want to buy it.’”
Ingraham quoted a statistic given yesterday by Deputy Prime Minister and Minister of Finance Peter Turnquest at the Royal Fidelity Bahamas Economic Outlook (BEO), who said that 80 percent of the houses in Marsh Harbour, Abaco, were not insured or underinsured.
“If 80 percent of the houses in Marsh Harbor were not insured, how are we going to build Marsh Harbour? The government certainly cannot afford it, [they] made an error in not being insured themselves. So, they have to help themselves before they can help others,” he pointed out.
Ingraham said insurance companies’ reinsurers have pegged Bahamas premiums for increased deductibles in some areas, while others have told local agents that they “wouldn’t do business in some areas”.
“Some said ‘we’re going to pull back and do less business in this area,’” he said.
Ingraham said insurers through their reinsurance partners will pay out $2 billion. He said Baker’s Bay’s claim alone was between $500 million and $800 million.
He recalled the shock of one reinsurer that covered $200 million in losses alone.
Despite the high insurance payouts for Dorian, Ingraham said no insurance company has folded because of the high number of claims.
Turnquest lamented during the BEO event that too many Bahamians take on the risk of not insuring property.
“Unfortunately, too many Bahamians take on unmanageable and unsustainable risk by not taking out insurance coverage on their home and business, or are underinsured,” he said.
“In the event of a significant loss, this exposed risk is transferred to the government, which is neither tenable nor budgeted for and thus poses a substantial threat to the country’s finances and credit standing.”