The Central Bank of Curaçao and St. Maarten (CBCS) noted an average insurance settlement percentage of 70 for damage caused by Hurricanes Irma and Maria in St. Maarten (see related story). For motor vehicles this was 92 and for property 65 per cent, out of some 8,200 reported claims in total.
The financial sector supervisor is worried about insufficient insurance coverage because of high catastrophe-insurance premiums, underinsurance of properties and ignorance about its consequences, a limited number of loss adjusters, scarce building materials, a lack of contractors impeding the timely submission of rebuilding estimates and resulting in higher cost, clients’ usage of insurance funds received to satisfy other needs, as well as increased insurance and reinsurance premiums.
Especially the issue of underinsurance due to its impact has the bank’s attention and guidelines are being developed in this area. Meetings were conducted by CBCS with representative organisations of insurance companies and brokers during which this topic was discussed.
Pending new guidelines, prospective clients should proactively address this matter with their insurance broker and company when taking out coverage. They are advised to ask questions about policy conditions and demand proper explanation about the eventual consequences of their choice.
Eight complaints have been received thus far by CBCS with respect to the hurricanes. It said all these were handled and measures taken where deemed necessary, but as the bank is legally bound to secrecy, details of those actions cannot be disclosed.
CBCS’ statement comes after the St. Maarten Employers Union (SEU) recently delivered a letter to the institution expressing concern about the many still-outstanding settlements. The Central Bank has now at least confirmed being aware of the problems and working on them, which is good to know.
