Insurance: are you prepared for hurricane season?

With the hurricane season in full swing again, many people’s thoughts turn to hurricane preparation. Whether restocking non-perishable food supplies, first aid kits or updating emergency contact information, everyone seems to be keeping busy.
 
Of course preparing for a storm well in advance avoids a last-minute rush to get things done, as well as the accompanying mistakes and oversights that might creep in if anything is done too hastily. The same applies to seeing that insurance is up to date. Unless a regular revision of insurance coverage is done, individuals and businesses could easily find themselves underinsured in the event of a catastrophic storm. Keeping track of any changes in home or business contents that may lead to the need for insurance to be increased can make it a lot easier to remain up to date.
 
“It seems we’re always renovating, moving, upsizing or downscaling to meet our needs.  We buy new things, replace the old with the new or sometimes add those well-deserved little luxuries along the way,” said Karim Awe of Cayman Insurance Centre.
 
“Your insurance coverage should change and grow with you whenever those life events happen.  Whether you’ve upgraded your computer, bought a new camera, added a few children or changed neighbourhoods, it may be time to review your current policy,” he added.
 
The company offers a complimentary policy review to help clients keep their insurance in step with their needs.
 
Recent years have seen a downward trend in insurance premiums from the increases experienced in the aftermath of hurricane Ivan.
 
As important as it is to keep insurance up to date, it is even more important to have insurance in place. There are individuals who would rather leave insurance until the last minute, approaching insurance providers when a storm is already approaching the Cayman Islands. However, keep in mind that insurance providers are in the business of risk management. Should the Cayman Islands fall within the cone of probability of an approaching storm, it is likely that the insurance provider will refuse to issue new insurance policies, as the likelihood of receiving claims on the policy within days of it being issued is greatly increased. It just does not make business sense. A little bit of planning can also go a long way when it comes to reducing insurance premiums. One of the best ways to do it is to increase the deductible payable on claims. The higher the deductible, the lower the associated premiums will be. Of course, this will mean a higher initial out of pocket payment by the insured before the insurance kicks in, but in the long run the savings on premiums may make this a worthwhile option for those looking to save on their insurance. Another element that can have an impact on property insurance premiums is construction techniques used in a building as well as the location thereof. Ocean front properties attract higher premiums than inland properties, due to the increased risk of wave damage. Standing seam metal roofing has proven more resistant to hurricane damage than many other systems and many insurers will offer lower rates on a home with such roofing than on other similar homes.
 
Of course, insurers in Cayman face challenges of their own when it comes to hurricane season. In the aftermath of a storm, an insurer may need to deal with thousands of claims from people in dire need of assistance. However, at the same time the insurer may be struggling to get systems back up and running. Some local insurers have prepared for this eventuality by preparing temporary business continuity facilities, which would allow them to have business back up and running in less than 24 hours. Such facilities can be used as claims processing centres in the event that a company’s main offices are compromised by a storm. Being fully prepared for hurricane season means taking care of all eventualities and updating insurance cover should be right near the top of the list, not a mere afterthought. The last thing anyone needs in the aftermath of a catastrophic storm is to find out they were underinsured.

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