The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The heavy flooding in New Providence will “cost the insurance industry a pretty penny”, Tribune Business was told yesterday, with underwriters reporting initial claims volumes of “70-75” and “a few dozen”.

Multiple property and casualty carriers said it was currently “impossible” to estimate the likely total number of claims, and collective dollar amount, given that many homeowners were still baling out and cleaning their homes.

They anticipate that the “overwhelming majority” of claims submitted will likely come from residential homeowners impacted by flooding, with the balance largely consisting of businesses and auto .

Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business: “We are getting in claims. We noticed that the majority of claimants are coming from homeowners in the eastern part of the island and the south, where the rainfall was heaviest.”

Mr Ward said loss adjusters had already been dispatched to assess the damage to policyholders’ assets, and said Bahamas First would have “a better idea” on claims numbers and value when their reports came back in today.

“We are anticipating there will be a fair number of claims reported in the next few weeks,” Mr Ward added.

“I’m sure that by the end of the day we will potentially have 70-75 claims or thereabouts already. There’s normally a slow build-up because people are still cleaning up.

“It’s not as bad as in the case of a hurricane, but in some ways it could actually be worse for the homeowner. Water is a very destructive agent, and if you’re talking about it affecting the electricals as well, some of the damage may be hidden and you will not have early detection in the first instance.”

Mr Ward, and other Bahamian insurers, expressed concern over yesterday’s front-page Tribune article, which detailed how a Prince Charles Drive homeowner was told by her agent, Colina General Insurance, that she could not make a claim because Tuesday’s ‘flooding’ did not meet the conditions stipulated in her policy.

Emphasising that this was not the case for Bahamas First, Mr Ward said: “Most of the commercial and private homeowners policies will cover these kind of events regardless of whether there has been the declaration of a catastrophe.”

The same went for comprehensive auto insurance policies, Mr Ward said, unless there were specific conditions attached. And, as Tuesday’s storm was a non-catastrophe event, the deductible (the amount paid by the policyholder before the insurance payout kicks in) will be much less.

Tom Duff, Insurance Company of the Bahamas (ICB) general manager, said Tuesday night’s heavy rainfall highlighted the unpredictability of the insurance business, and how a major event could change the outlook for Bahamian general underwriters.

Disclosing that ICB had been holding its first quarter Board meeting on Tuesday afternoon, just hours before the storms and flooding hit, Mr Duff revealed: “We were congratulating ourselves on having a good first quarter and year-end, and in the space of 12 hours....... that’s the risk business.”

He added that it was “almost impossible” to put numbers on the expected volume and value of insurance claims, given that many policyholders were still “underwater” and cleaning up their homes.

“We’re expecting claims for sure,” Mr Duff said, “but we can’t put a figure on it now. The one saving grace, if you want to call it that, is this was confined to one general area - the eastern and southern side of New Providence.

“In a hurricane, you’re dealing with multiple islands and overseas occupants.”

Noting that homes had been flooded by up to six inches, or two-three feet of water, depending on their location, Mr Duff said the wait for water to drain away would make damage assessments even more difficult.

He added that the damage to impacted vehicles and cars may not be as bad as in a hurricane, as the water affecting them was not sea water, and thus contained no salt.

Timothy Ingraham, Summit Insurance Company’s president, told Tribune Business: “We’re still assessing the value and getting the adjusters out to see the damage done to client premises.

“It’s difficult to put a value on it. We’re into a few dozen claims now, with the overwhelming majority of them homeowners’ claims. A couple are motor, and one or two business-owned premises. By early next week we will get a handle on the numbers.”

Both Mr Ingraham and Anton Saunders, RoyalStar Assurance’s managing director, said the last event that bore comparison to Tuesday night’s rains was the 1997 Spring tide that flooded eastern New Providence.

“This is not a catastrophe, and it’s going to cost the insurance industry a pretty penny,” Mr Saunders told Tribune Business, adding that it showed the importance of homeowners putting the necessary coverage in place.

“Certainly, there will be claims,” he added. “People are still trying to recover from the shock of two-three feet of water in their homes. They are trying to get the water out of their homes and rebuild their lives.”