Home insurance — a need or want in the Caribbean?

“What will it take for people to understand the importance of having home insurance?”

That’s the question from Insurance Association of Jamaica (IAJ) Executive Director, Orville Johnson, in a BUZZ interview on insuring homes in the Caribbean – particularly with our vulnerability to hurricane and earthquake damage.

Orville Johnson, IAJ, Executive Director

Mr Johnson shared his insight on the topic for potential and existing homeowners.

Why is it important to insure homes in the Caribbean?

A house is the largest investment most persons make in a lifetime, if there is a loss due to any hazard such as a hurricane, earthquake or fire it is hard to replace without insurance. There is no substitute for Insurance. It is even more critical in the Caribbean which is in both a hurricane and an earthquake zone. The recent events in the Bahamas and in Dominica and Puerto Rico is evidence that with global warming the risk is greater.

“Only 20-25% of Jamaican residences are insured.”

— Orville Johnson, IAJ President

Is there a noted trend in Jamaica regarding home insurance?

The trend in Jamaica has been that persons only buy Insurance when they have a mortgage on their house as it is a requirement of the lender. However, persons are less keen to protect their investment for themselves. Many in fact do not insure after the have paid off their mortgage. As a result, our numbers indicate that only 20-25% of Jamaican residences are insured.

A house is the largest investment most persons make in a lifetime, if there is a loss due to any hazard…it is hard to replace without insurance.

— Orville Johnson, IAJ President

What are some of the factors that contribute to persons not insuring their homes?

Persons as I said do not consider at a priority, the say it is too expensive, others do not trust insurance companies, others are under the mistaken notion that they can manage without it.

What would be the recommendation for first-time homeowners?

It is very important that persons ensure they protect their house with insurance as it a very valuable asset which is a very important tool in achieving your financial goals. Over time it can be used to secure loans for education of children, acquire other property for investment and of course for retirement purposes.