Insurance Industry to institute new flood policy

Mar 17, 2014 News

– In light of inaction by relevant authorities to correct poor drainage issues

While some entities which are insured would expect to be covered for damages by floods, the inaction by the appropriate Ministries to address the problem has caused the Insurance Industry to now restructure its policies as it relates to what damages by floods can be deemed “insurable.”

A flooded section of the Mayor and City Council compound. The M&CC is one of the agencies responsible for addressing the flood situation.02

Businesses and homeowners are constantly made to suffer from the severe effects of “the usual floods” due to chronic issues of poor management and the inability of the relevant authorities to take a hands-on approach to the matter.
Specifically, the flooding which occurred in central Georgetown and several other communities on January 14, just a few months after the one which occurred on November, last year, has pushed the Insurance Industry into a state of worry.
The development was made known in a press release published yesterday. In the notice, the Insurance Association reminded that in a previous statement its members had expressed concerns over the main causes of the floods. These are: drainage facilities, which are poorly maintained, and the garbage discarded in drains and canals, which seem to have now become an accepted culture.
Also disturbing to the members of the association was the alarming reality that some of the pumps necessary to facilitate proper drainage around the country are not available, and the ones that are, were dysfunctional. The lack of information as to when this might be fixed is also a worry to the Insurance Industry.
The rainy season is expected to continue for several weeks and the insurance association has noted with regret the deficiencies of the country’s weather forecasting body. And as such, the Insurance Association must now prepare itself for more flood damage claims.
“It should be pointed out that insurable risks are subject to fortuitous occurrences and when an event lending to a loss is inevitable then the risk becomes uninsurable,” the Association also noted.
As a result, the Industry will soon inform policyholders of the new system of endorsing measures that can be eligible for flood cover.
While noting that it is aware that the new system will most certainly affect both businesses as well as private homeowners, the Association maintains that they will hold firm to their decision until it is satisfied that significant action has been taken by the responsible authorities and the citizenry to rectify the current state of affairs.
Below is a list of the Insurance Companies who approved the said message and sponsored the published release in yesterday’s edition.
· Demerara Mutual Life Assurance Society Ltd.
· Demerara Fire and General Insurances
· Caricom General Insurance Inc.
· GCIS Inc.
· Guyana Trinidad Mutual (GTM) Group of Insurance Companies Ltd.
· Hand-in-Hand Life
· Hand-in-Hand Fire
· John Fernandes Insurance services Ltd.
· North American Life Insurance (NALICO)
· North American Fire Insurance (NAFICO)
· Assuria Life &General (Gy) Inc.
· Guyana Insurance Brokers