Hoteliers fear insurance rates could increase by as much as 40 per cent
The Caribbean Hotel and Tourism Association (CHTA) says regional hoteliers should plan now for an increase in insurance premiums following the passage of two Category 5 hurricanes in September.
Hurricanes Irma and Maria caused widespread destruction and death when they hit the Lesser Antilles, particularly the islands of Barbuda, Dominica, the British Virgin Islands, Turks and Caicos Islands, St Martin, and Anguilla. The damage has been estimated at billions of US dollars.
The CHTA said that the new rates could be as low as 10 per cent and high as 40 per cent.
It said that at a recent webinar it hosted, Scott Stollmeyer, the managing director, Barbados and the Eastern Caribbean for CGM Gallagher, advised that now is the time to review coverage to ensure it is adequate to insure against possible future damages.
He said hoteliers should also look at ways to minimise the expected premium increases. Stollmeyer said that for the past eight years the Caribbean has enjoyed reduced insurance rates, but that will now change.
He said following the hurricanes, insurance companies have begun reaching out to their clients, informing them of the increases that will occur in their next renewal cycle for inland and beach properties, adding this will lead to a "hardening" market.
"We are going to be in for some challenging times in the next few years," the insurance official predicted, saying the increase will affect the entire region, not only those islands that were struck by the hurricanes. "The Caribbean is ... lumped into one general region ... it's where the reinsurance markets are looking at the Caribbean as a general region. Everybody is going to be impacted," Stollmeyer reported.
Certified public accountant and licensed adjuster with Smith Orloff & Associates, Stanley Smith, advised hotel owners and managers to be proactive and be their own advocates when handling insurance claims. "It pays to know your policy well before a disaster strikes. First, making sure you're adequately insured, understanding what's covered and what's not, and keeping good records are fundamentals which hoteliers should adhere to."