The hurricane insurance trap

The saga of hurricane recovery continues.

Early estimates suggested that as many as 70,000 or 17 percent of Bahamian residents were left homeless by Hurricane Dorian.

Many hundreds of the hurricane-displaced found refuge internationally in the United States, some as far afield as Canada.

Most sheltered with family and friends on other islands in The Bahamas. The least fortunate were accommodated in government hurricane shelters.

Five months on, many who sought shelter internationally have returned home, and some displaced to New Providence and parts of Eleuthera, Exuma and Andros are trickling back to begin the long road to recovery.

The several thousand originally housed in hurricane shelters has dwindled to some 250.

The government’s announced Small Home Repair Programme provides for qualified homeowners to receive up to $10,000 toward the repair of homes damaged or destroyed by Hurricane Dorian.

This is a departure from the long-held practice when the government provided construction materials and labor for the repair of uninsured homes.

No program has been announced for the construction of replacement homes for the uninsured poor as was the case for destroyed homes of the uninsured poor following earlier disasters such as hurricanes Betsy in 1965, Andrew in 1992, Floyd in 1999 and so on.

Such “hurricane” houses still dot the landscape in North Eleuthera, Cat Island, Acklins and Abaco.

During the 1990s and in the first decade of this century, CARICOM states sometimes provided teams of construction workers who repaired and or built homes for the uninsured poor.

Last week, the chairman of the Disaster Reconstruction Authority advised that some 1,400 individuals had signed up to receive assistance under the program.

To qualify for assistance, applicants must be uninsured homeowners able to prove their ownership of the damaged residence and that they were living at the location on August 31, 2019.

On the face of it, these may appear reasonable requirements.

However, the reality is that on most Family Islands, land ownership is not so easily established.

Many Family Islanders live on land and in houses constructed by ancestors – parents, grandparents, even great grandparents or other relatives — without clear title.

And, even where proof of ownership is possible, many uninsured homeowners find that labor costs for repairs alone far exceed sums available under the government program even where they are able to access construction materials from donated supplies or duty-free importation directly into Abaco and Grand Bahama.

Moreover, many have discovered that construction materials, supplies and replacement appliances purchased by them or on their behalf elsewhere in The Bahamas, but outside of Abaco and Grand Bahama and which are not available for purchase on those islands, attract 12 percent value-added tax (VAT).

Still other difficulties also arise for residents who are able to certify their home ownership and who hold some form of hurricane insurance.

Such homeowners do not qualify for assistance under the announced Small Home Repair Programme because their residences were covered by insurance at the time of the hurricane.

However, many discovered that the insurance coverage they hold is woefully inadequate to cover structural damage sustained and does not cover damage to contents – furniture, appliances, other technology, dishes, linens, artworks, family mementos and clothing.

It appears that as a result of weak consumer education, some individuals with insurance connected to their residential mortgages are only now discovering that their insurance is primarily meant to cover the banks’ financial exposure and not their own risk as a borrower.

Unlike following previous hurricanes, this time there is no plan or program that will replace uninsured homes destroyed and there is less relief for those with insurance needing significant additional assistance.

For most individuals whose homes were destroyed by the hurricane, hope for new accommodation rests with labor and supplies provided by churches, family members and charities, mostly foreign.

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