NASSAU, BAHAMAS-As the 2026 Atlantic hurricane season officially got underway on June 1, an insurance executive urged Bahamian homeowners and businesses to ensure their properties are adequately protected, warning that underinsurance could leave them facing significant financial losses after a storm.
Anton Sealy, director and vice-president at Insurance Management (Bahamas) Limited, said property insurance remains one of the most important investments homeowners can make given the Bahamas’ exposure to hurricanes and other natural disasters.
“Your home is perhaps your single greatest investment you would make in your lifetime, so it would behoove you to ensure that that investment is protected,” Sealy said. “The best way to protect that investment is by having a very robust insurance coverage over that home.”
While many homeowners continue to express concerns over the cost of property insurance, Sealy said significant premium reductions are unlikely in the near term.
“Right now, we’re still reeling from the effects of Dorian and the fact that we, the Bahamas, we live in a hurricane-prone zone,” he said. “It’s not a question of if we’re going to have a hurricane, another hurricane, it’s a question of when.”
He argued that while rates appear to be stabilising, major decreases are not realistic given the risks faced by insurers and reinsurers.
“I think you’re seeing a relaxation of rates. I don’t think you see rates going up this year, but certainly it’s not going to be going down significantly,” Sealy said.
The insurance broker noted that property insurance premiums are determined by several factors, including a building’s construction type, location, proximity to the coast and elevation.
“The type of construction, whether it’s a wooden home versus a concrete block home, if it’s within a certain distance of the waterfront or whether it’s inland, whether it’s elevated as opposed to not,” he said.
Sealy also cautioned homeowners against reducing insured values in an effort to save money, describing underinsurance as one of the biggest mistakes property owners can make.
“The most important thing is to ensure that the value that you insure your property for represents the full replacement cost of the property,” he said.
He explained that homeowners who insure a property for less than its true value could face the application of what the insurance industry calls “average”, resulting in claims being reduced proportionately.
“You told the insurance company that by insuring 50 percent of the property, you’re your own insurer for the other 50,” Sealy said. “Therefore, the insurance company in honoring their contract will pay their 50 percent of the loss.”
Instead of reducing coverage, he encouraged policyholders experiencing affordability challenges to speak with their brokers about payment arrangements.
“Get with your broker and see if you can work out some sort of an installment plan for the payment of the premium,” Sealy said. “But do not try to save premium by underinsuring your property. That’s the last thing you want to do.”
Looking ahead, Sealy said climate change and increasing flood risks could make some properties more difficult or expensive to insure, particularly those located in flood-prone areas or along coastlines.
“We’ve seen over the last few years that there’s certain areas, particularly in New Providence, that when we have any significant amount of rain, these areas flood and the water stays around for days,” he said.
“No insurance company is going to take on a risk that they know with certainty is going to have a loss.”
He added that some insurers may eventually decline coverage for high-risk properties altogether or impose substantial deductibles that could make coverage prohibitively expensive.
