Hoteliers fear insurance rates could increase by as much as 40 per cent

Hoteliers fear insurance rates could increase by as much as 40 per cent
27 Nov

The Caribbean Hotel and Tourism Association (CHTA) says regional hoteliers should plan now for an increase in insurance premiums following the passage of passage of two Category 5 hurricanes in September.

Hurricanes Irma and Maria caused widespread destruction and death when they hit the Lesser Antilles, particularly the islands of Barbuda, Dominica, the British Virgin Islands, Turks and Caicos Islands, St. Martin and Anguilla. The damage has been estimated at billions of US dollars.

The CHTA said that the new rates could be as low as 10 per cent and high as 40 per cent.

It said that at a recent webinar it hosted, Scott Stollmeyer, the managing director, Barbados and the Eastern Caribbean for CGM Gallagher advised that now is the time to review coverage to ensure it is adequate to insure against possible future damages.

He said hoteliers should also look at ways to minimize the expected premium increases. Stollmeyer said for the past eight years the Caribbean has enjoyed reduced insurance rates but that will now change.

He said following the hurricanes, insurance companies have begun reaching out to their clients informing them of the increases that will occur in their next renewal cycle for inland and beach properties, adding this will lead to a “hardening” market.

“We are going to be in for some challenging times in the next few years,” the insurance official predicted, saying the increase will affect the entire region, not only those islands that were struck by the hurricanes. “The Caribbean is … lumped into one general region … it’s where the reinsurance markets are looking at the Caribbean as a general region. Everybody is going to be impacted,” Stollmeyer reported.

Certified Public Accountant and Licensed Adjuster with Smith Orloff & Associates, Stanley Smith, advised hotel owners and managers to be proactive and be their own advocates when handling insurance claims. “It pays to know your policy well before a disaster strikes. First, making sure you’re adequately insured, understanding what’s covered and what’s not, and keeping good records are fundamentals which hoteliers should adhere to.”

He provided examples of the claims process and how, because of inadequate planning or not fully understanding their policy, many hoteliers fail to fully recover insurable losses through their claim.

Smith advised that retaining your own advocate or adjuster can assist with facilitating a claim.

The general manager of the Pelican Bay Hotel, in the Bahamas, Magnus Alnebeck, who also participated in the webinar, said hoteliers that before a storm, checklists must be made and photos taken of everything.

He said after the storm, staff must get a grasp of the state the property is in, taking photos of any damage, and managers should make sure that their staff is looked after, as they are the most valuable asset.

“What we have found is that the quicker you can manage to create some sense of normality, or as we call it ‘the new normal’, you get people into their routines and it will make the process of getting back quicker,” stated Alnebeck, advising hoteliers not to wait until the insurance company visits to start repairing their properties.