New flood insurance measures coming- Insurance Association

Last Updated on Saturday, 26 December 2015, 20:59 by GxMedia

The Insurance Association of Guyana (IAG), warning that flood damage and loss could soon become uninsurable, signalled that the conditions for flood-related insurance would soon change and remain in force until the drainage situation improves.

“The insurance industry will shortly inform policyholders of the new structure of underwriting measures applicable to flood cover.

These measures will impact businesses as well as private homeowners and will continue until the industry is satisfied that meaningful action is being taken by the relevant authorities and the citizenry to correct the deficiencies which have given rise to the escalated frequency and severity of flooding,” said the IAG in a statement published in Sunday’s newspapers.

Endorsed by 12 insurance companies, the IAG said if the authorities do not take steps address the poor upkeep of drainage facilities and ensure that all pumps that drain Georgetown are working no insurance would be given to cover flood-related losses. “The inaction of the relevant authorities to correct this unsatisfactory situation will soon cause the risk of loss by flooding to become uninsurable,” the association said.

The IAG pointed out that insurable risks were subjected to fortuitous occurrences and when an event leading to a loss becomes inevitable then the risk becomes uninsurable.

Expressing “serious concern” about the “severe flooding” that occurred on November 27, 2013 and January 14, 2014; the association noted that the unsatisfactory maintenance of drainage facilities and the “culture of disposing garbage in drains and canals” were the main causes of frequent flooding in Georgetown and its environs. “What was especially disturbing about this latest round of flooding was the admissions that some pumps necessary to drain the city were not working. Of even greater concern, was the absence of any assurance as to when they might be repaired,” the IAG added.

The concerns were expressed by the Demerara Mutual Life Assurance Society Limited, Demerara Fire and General Insurance, Caricom General Insurance Inc; GCIS Inc; Guyana and Trinidad Mutual Group of Insurance Companies Ltd; Hand-in-Hand Life, Hand-in-Hand Fire, John Fernandes Insurance Services Ltd; North American Life Insurance, North American Fire Insurance, Assuria Life and General (Guy) Inc, and Guyana Insurance Brokers.