Industry expert responds to concerns raised by the Premier
Premier & Finance Minister David Burt, and Caroline Mills-White, EVP at BF&M and Argus. File photos
Home Insurance costs have risen with insufficient explanation, according to Premier David Burt. In response, a local insurer has stated that they seek to provide clear coverage to the level preferred by the customer.
Expanding on the Throne Speech, Premier and Finance Minister David Burt said on Monday Bermudians had told them on the doorstep that home insurance has gone up with little transparency on how premiums are determined.
He continued, “…we will work with the Bermuda Monetary Authority and industry stakeholders to review home insurance regulations and explore policy reforms that allow homeowners to select appropriate coverage levels based on realistic risk assessments. The goal is simple: to provide relief to Bermuda’s homeowners from rising home insurance expenses, and ensure that they have fair options when choosing their level of coverage.”
We reached out for comment from local insurers. A spokesperson for BF&M and Argus said they understand the concerns, while elaborating on the types of cover they provide and what may affect costs.
Caroline Mills-White is EVP, Group Head of Property & Casualty and Broking Services at BF&M and Argus.
She said their property policies covering key risks such as fire, storm, flood and liability, allow policyholders to tailor coverage within set parameters. A customer can remove certain perils or select a higher deductible, which can lower premiums.
However, a fundamental principle of insurance is to ensure properties are covered to their full replacement value, she says, and reconstruction costs are updated each year. If a property is underinsured, the policyholder would assume a proportional share of any loss.
Ms Mills-White elaborates, “…if a building has a replacement cost of $1,000,000 but is insured for only $500,000, a total loss would result in a maximum payout of $500,000. In the case of a partial loss of $100,000, the claim payout would be reduced to $50,000 to reflect the 50% underinsurance.”
Ms Mills-White also says their reinsurers expect policies to be insured to correct values, as underinsurance affects reimbursement at all levels of the insurance chain.
She continues, “While we provide guidance to help clients make informed choices, the ultimate responsibility for selecting coverage rests with them.”
“When a mortgage lender is involved, they typically require insurance that covers full replacement costs to protect their financial interest”.
Following the Premier’s commitment to review home insurance regulations, Ms Mills-White says BF&M and Argus remain committed to working collaboratively with stakeholders to ensure homeowners continue to have fair, transparent, and sustainable insurance options.
She concludes, “Our goal is to balance affordability with adequate protection so Bermuda’s homeowners can confidently safeguard their properties against unforeseen risks.”
