LETTER TO THE EDITOR

Insurers must be made to provide upgrade coverage option

Tuesday,  May 10, 2005

Dear Sir,

A provision in property insurance should be made through the Legislature that would give homeowners a bit more relief if they are forced to rebuild homes to today’s tougher building codes. The high cost of repairing or rebuilding to meet more stringent building rules became a critical issue for homeowners after the 2004 hurricane season, with particular reference to Hurricane Ivan that devastated Cayman, and many places are facing such a predicament.

The Legislature should pass immediate legislation to require that the insured has the option of buying extra coverage to cover an additional 50 percent of a policy’s face value to pay for the higher construction cost, as so many people are under-insured according to the insurance companies.

When a person sustains a total loss, this coverage would give the opportunity to get 25 to 50 percent more to rebuild with to help cover the higher than normal cost of rebuilding. 

Making optional coverage available makes sense. Up to the time of Hurricane Ivan most Insurers offered replacement cost policies but limited coverage to the policy’s face value. Even with the extra coverage home owners still may not have enough money to rebuild their homes, given the higher construction cost after Hurricane Ivan.

This Legislation should be a priority for the new Legislature as we are just weeks prior to the start of another hurricane season.

Floyd De Osca

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