Holders of property and vehicle insurance are being encouraged to review and discuss the deductible/excess clause of their general insurance policy contracts with a view to better understanding them to make the claims process easier.
This advice comes from Deborah Raoul, Assistant Manager, Operations, Eastern Caribbean at Sagicor General Insurance Inc (SGI), who noted that as the hurricane season approaches, and persons may be doing emergency preparation, it is important that they clearly understand the details of this area of their policy. Raoul said, “We work alongside our policyholders to ensure they understand this aspect of their policy as it can be easily overlooked. In many cases, individuals only pay attention to it during the claims process.” She therefore urged policyholders to engage their insurers on this subject to understand what their personal responsibilities would be, if the need did arise to make a claim.
A deductible/excess is the amount of money that a policyholder is responsible for in the event of an insured loss. “In other words, if a disaster impacts your insured property or your insured vehicle is involved in an accident, the deductible/excess is the amount that the policyholder is responsible for before the claim is settled and the funds are disbursed to repair or rebuild the property, or repair or replace the vehicle,” Raoul explained.
With respect to property insurance, the Manager stated that this deductible/excess amount for losses resulting from natural catastrophes is calculated at two per cent of the sum insured, which is the amount that the property is insured for. Raoul said, “If a property is insured for $400,000, for example, then the deductible/excess would be $8,000, meaning that if the property was damaged or destroyed, $8,000 is the amount that would be subtracted from the settlement amount being paid to the policyholder.”
“Where understanding excess becomes even more of an issue is when properties have been underinsured; in other words, the owner insures the property at an amount lower than what it would cost to rebuild. As a result, if this house was damaged by a hurricane or storm, then the claim settlement would also be proportionately reduced.” As an example, she explained that if you insure only 70 per cent of the rebuild cost, your repair claim will be paid in a like manner.
The experienced insurance practitioner said this is one of the reasons why Sagicor constantly reminds and encourages policyholders to insure their property at the correct rebuild cost by obtaining an updated property valuation when reviewing and renewing their policy.
“With respect to comprehensive vehicle insurance coverage, there is a predetermined deductible/excess amount that policyholders agree to when confirming their policy”, Raoul stated. “Instead of the percentage approach taken with property, this set dollar amount is what will be subtracted before the settlement is paid to a policyholder whose vehicle was damaged or written off. Unlike property insurance, if the policyholder was not at fault for the accident and the other party has accepted liability, this deductible/excess is waived. However, if the other party refuses to accept responsibility, the deductible would kick in.”
The SGI executive therefore advised policyholders to read their policy documents and to take any queries to any one of the company’s team of knowledgeable representatives or using one of many options, such as calling 452-0994, sending a WhatsApp message to 1 (246) 467-7243, emailing [email protected], or connecting via SGI’s Instagram and Facebook pages.