Hotel insurance expected to increase

Caribbean hoteliers should expect to pay between ten and 40 per cent more for insurance after the passage of hurricanes Irma and Maria, which struck several islands in September.

The advice comes from Scott Stollmeyer, managing director, Barbados and Eastern Caribbean, for CGM Gallagher Insurance Brokers.

He explained the increases will affect the entire region, not only those islands 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 was speaking earlier this month at the Caribbean Hotel and Tourism Association’s webinar on Hotel Property Insurance After the Storms.

The association says Stollmeyer and other panellists advised that now is the time to review coverage to ensure it is adequate to insure against possible future damage, and, without compromising coverage, to look at ways to minimise the expected premium increases.

Stollmeyer said, for the past eight years the Caribbean had enjoyed reduced insurance rates but that will now change. He said after the hurricanes, insurance companies have begun informing their clients of the increases that will occur in their next renewal cycle for inland and beach properties.

Stollmeyer explained this will lead to a “hardening” market. “We are going to be in for some challenging times in the next few years.

Meanwhile Stanley Smith, certified public accountant and licensed adjuster with Smith Orloff and Associates, 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.”

Smith 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. The association said Smith advised that retaining one’s own advocate or adjuster can assist with facilitating a claim.

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