Question: I read your article "Insuring your house against hurricanes" on the web version of The Gleaner. I want to insure my house and contents. The house is in Hope Bay, Portland. It is now being renovated. The wooden walls are being replaced by reinforced concrete. It will have four bedrooms. Will the insurers have to inspect it before I can get an estimate of the premium?
- Hermin.Kirkland@thetube.com
Answer: I enjoy writing this column. I seldom know where it will take me from one week to the next. With the reach of the Internet I cannot tell from which part of the world my next e-mail will originate. The question you posed actually covers two areas. One deals with insurance for buildings undergoing construction. The other is with the coverage [aka insurance] of the completed building and its contents. I will get to your question, but I will travel there by the longer, perhaps more scenic, route!
Many persons who renovate their houses [or other types of buildings] do not transfer their risks to insurers. They self-insure their risks. Whether this is planned or accidental I do not know. The practice of self-insurance does not make a great deal of sense for construction projects, large or small. The exposure of our island to natural disasters like floods, earthquakes and hurricanes is the main reason why these risks should be transferred. Construction materials and partly built structures are prone to losses. Contractors, builders, engineers and architects are aware of this. Even the government, whose risks are spread across the island, insures its projects. It is, however, another story after the construction phase ends.
I sense that you have not bought insurance while your house is undergoing reconstruction. If I am right, I recommend that you do so. It is still not too late, even though we are in the hurricane season. The sum insured for this type of coverage should be based on the estimated contract price. This includes the costs of all building materials, labour costs, plus the contractor's profit. The theory behind this is that if the structure were to be damaged, insurers would pay to rebuild it. For more information on the subject visit americancustomhomes.net/insurances.htm and http://www.jiiconline .com_definitions.
Insurers do not normally have to inspect your house before giving you a quotation. In the case of a house that is being built or renovated the onus is on you to supply the details, like the type of walls, floor and roof, the contract price and the period of construction. These features influence the rate that will be charged for coverage. This is not unlike insuring a completed house or its contents.
You can get quotations for insuring your house and contents by contacting insurers here via their websites. In my opinion, the well-constructed website will provide a clear indication of the information you will need to submit to obtain the quotation for your house and its contents and give you details of the coverage. My suggestions are based solely on the content and the facilities insurers say they offer for providing quotations.
Here are three sites that are worth checking: www.jiiconline.com, www.gl obeins.com and www.bcicdirect.com. I would recommend that you consider this the first phase of an exercise to find out what is available. Cost ought not to be the only factor. You need also to compare their coverage offerings, find out about their reputations for paying claims and assess and compare their financial strength.
I hope these comments will help you to reduce some of the risks associated with your construction project and to preserve your investment in the beautiful parish of Portland.
Cedric E. Stephens provides advice on risks and insurance. If you need free information or advice to solve a problem, write to The Financial Editor or, contact Mr. Stephens directly at aegis@cwjamaica.com
