Read our article in The Chamber Magazine, eversion
Insurance is based on the principle of the losses of the few being covered by the contributions of many to a large pool of funds. When Hurricane Ivan hit Cayman in 2004, the claims were paid from premiums paid by people all over the world into this pool of funds.
Similarly, when Cayman is not affected by hurricanes, premiums paid into the pool here help to pay for losses elsewhere. When the pool is depleted, it must be replenished, and if the depletion is severe, this can lead to increases in the amount of premium contributions.
Cayman did not experience any natural catastrophes in 2011, but the rest of the world was not as fortunate. Earthquakes in New Zealand and Japan, flooding in Australia and Thailand and storms in the Philippines and Europe all combined to present reinsurers with one of the costliest years ever, and the final cost is still unknown.
As a result, insurance premiums are being increased in many countries around the world, including Cayman and the rest of the Caribbean.
There are ways of reducing the cost of your property insurance. In the aftermath of Hurricane Ivan, construction standards in the Cayman Islands have improved tremendously. Some people have built to hurricane resistant standards and do not think that their buildings can be damaged by a hurricane.
If you are confident in the strength of your home, you can exclude hurricane cover and this may produce savings of 30% or more, but will cover Earthquake, Fire and the other non-storm perils.
If you also exclude Earthquake , savings may be in excess of 50%.
Alternatively, if you do not wish to completely exclude hurricane coverage, you can accept higher deductibles. If you currently have a 3% deductible, increasing this to 5% or 10% may produce savings of 10% to 20%. Remember though, that this means that you will be unable to claim for some losses which you would have been able to claim for with a 3% deductible.
We will be pleased to discuss these options with you, along with other aspects of your property insurance. Call us or ask your broker about us.
For more info
T: (345) 948-2266
E: [email protected]
W: www.CaymanFirst.com
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