Storm damage causes the highest volume and cost of insurance claims in Bermuda. For example, in 2014, the average home insurance claim after Hurricanes Fay and Gonzalo was for more than $10,000.
While being prepared is the best way to prevent or minimize damage to your property during a storm, if you do have to make a claim, here are some tips to help you get the most from your home insurance.
Understand your policy
Know your benefits. Many policy owners are not aware that they are covered for loss of rent, or the cost of alternative accommodation resulting from storm damage. There are also allowances for limited pet coverage. Insurance covers removal of building debris and replacement of spoiled food in freezers. If your fresh water is contaminated by cause of a windstorm or flood, this is also covered.
Review your policy carefully for conditions and exclusions. Unoccupied homes, satellite dishes, solar panels, docks, and sheds are subject to special conditions. If the risks for which you seek protection are not disclosed, this could limit your pay out in the event of a claim.
Understand your deductible
A deductible is the amount of money that a policy owner is responsible for paying in the event of a claim before the insurance company makes a payment. For example, if your deductible is $1000, and you make a claim for $5000, you will pay $1000 and your insurance provider will pay $4000.
Deductibles apply to building and contents damage caused by windstorms, earthquakes or floods. While you can reduce your annual premium by selecting a higher deductible, make sure you select an amount that you can afford to pay if you have to claim. By increasing your deductible, you are effectively self-insuring for an increased amount of money.
Review your sums insured annually
Rebuilding costs tend to rise over time so you should review your sums insured annually to ensure you have adequate coverage. You should also review your policy after any renovations because the cost to rebuild your home may have increased.
When considering your contents sum insured, use this rule of thumb: include anything you’d take with you if you moved house – including items such as curtains and rugs.
If your sum insured is not sufficient at the time of a claim, your claim payment may be proportionately reduced.
BF&M can help
BF&M is Bermuda’s leading home insurer with years of experience in protecting the things that matter most to Bermudians. Call us to request a free external building survey or advice on calculating your building and contents sums insured.
If you are a commercial property owner or tenant, be mindful that your insurance needs vary from those of residential property owners. Our commercial underwriters are here to assist if you need advice on protecting your property or developing a business recovery plan.