Financial & Insurance Companies failing Virgin Islanders - Skelton-Cline
"Insurance is a challenge, continues to be a challenge... it's a sky-rocketing challenge and we must come up with an insurance construct that comes against the status quo, at least compete against the status quo that allows for a more affordable living in this country," he said.
Skelton-Cline was at the time speaking on the Tuesday, February 11, 2020, edition of his radio show where he noted that many Virgin Islanders are still reeling from the effects of hurricanes Irma and Maria of 2017, resulting in a high cost of living.
"We need to move beyond talking and put in an apparatus in place that is a safety net for so many hurting people out there... No matter how well off you and I thought we were, on the heels of those hurricanes we all saw exactly where we were. We were left naked," he said.
Systematic approach needed - Skelton-Cline
According to Mr Skelton-Cline, with rising local costs, more needs to be done to increase the quality of life in the VI through policies and initiatives implemented by financial institutions.
"It's an expensive place to live in this place we call home, and their needs to be a cohesive, systematic, a strategic effort in how we will increase the quality of life but deflate the cost of living in this territory," he said.
Skelton-Cline said banking restrictions continue to be a major additional issue plaguing the territory.
"You can't get loans, be it mortgage, be it otherwise... something needs to change. There needs to be a greater demand placed on these institutions who have reaped the benefits of this territory from its citizens but are not giving back in proportion," he said.
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15 Responses to “Financial & Insurance Companies failing Virgin Islanders - Skelton-Cline”
The VI has a population of approximately 34000-36000 people and this small population size will result in insurance premiums being higher than in other locales than have a larger population. To stay solvent and operational, insurance companies( property, medical, auto.....etc) have to charge higher premiums. And due to the high cost many property owners may forego buying insurance, for example property insurance. Further, instead of buying complete replacement cost insurance, they gamble and go for lower cost underinsurance. Moreover, the complacency developed due to the VI not being directly hit by a major hurricane for decades may be a factor for some property owners not having insurance. The VI is highly vulnerable to natural disasters, ie, hurricanes, earthquakes, flooding.....etc so it is not if but when for example a major hurricane will hit.
Moreover, there are no easy solutions to this issue, this crisis. As noted earlier, the higher contribution pool, the lower the premiums. Government may need to collaborate with other regional sister countries about the possibility of participating in a larger pool. Additionally, insureds should more actively manage perils, the cost of loss, and hazards, condition that creates or increase the chance of a loss, ie, physical, moral, and morale. Government and other stakeholders should partner and launch a public education and outreach programme on insurance. Perhaps as an incentive to buy full replacement cost insurance on property, government can make the cost deductible (credit) on income taxes. This should be not an invitation for insurance to raise rates; their rates should be fair and reasonable.
Where is your affordable housing policy so as housing cost increases you are not leaving those at the bottom out in the cold?
Where is your consumer protection policy to prevent insurance companies and expat realtors from under valuing the homes of locals? Then when the hurricanes hit the insurance companies could justify less payout for repairs because the locals who did have insurance were underinsured strategically for less than replacement value? Some locals who had retirement savings had to exhaust those funds to fill the gap that insurance should have covered. So now the are back in the poor house in retirement.
Where is your consumer protection policy and education awareness campaign to combat insurance companies selling expensive universal whole life policies to both young and old when particularly the younger ones could have purchased fixed cost term life for significantly less while investing the difference and coming out ahead, leaving their children a legacy. The only people getting wealthy from those policies in the BVI are the insurance agents. Some of those agents themselves don't fully comprehend the product they are selling locals. So you know the policy holder didn't understand what they purchased. Had some instead reduce the whole life cost and insured up to 80% of the replacement value of their home they would be in a better place. In some case some of our people who know better are also too cheap.
Where is your policy against redlining so expat realtors can stop devaluing locals' homes and land. And stop renaming communities as part of the plot to market certain areas to expats only? Until a host of these issues are addressedcyou will have a job just talking about the problems and no action.
2. Who is responsible for the proper insurance debacle in the VI, the customer or the agent?
3. Was the agent pushing underinsurance to sell more policies? If so was the customer ill-served?
4. Was the customer properly briefed on the down side of underinsurance?
5. Was the customer briefed on the importance of the 80% rule?
6. Did BVI property get complacent because no major hurricane made a direct hit in decades?
7. Does the building code needs to be upgraded?
8. Does government need to perform better inspection of construction to ensure building code is being followed?
9. Should government subsidize property replacement cost insurance?
10. Is stronger oversight of insurance companies doing business in the BVI needed?
11. Do insurance agents need to be licensed and bonded?
12. Should insurance companies have to post a bond?
13. Is government self insured?
14. Should government seek membership in regional pool to lower cost?
15. Should insurance fraud be dealt with harshly?
16. Should insurance companies have a maximum amount of time to resolve a claim?
17. Other than the court where can customers go to resolve disputes?
18. Should government enter the insurance business or leave it to the private sector?
19. Is the Law of Large Numbers really a factor in insurance cost in the BVI?
20. Should insurance companies have to rebate customers who have not file a claim?