Barbados is entering another hurricane season with tens of thousands of homes still uninsured, raising concerns about the island’s financial resilience in the face of increasingly frequent and costly natural disasters, Barbados TODAY has learned.
Industry figures have warned that too many property owners remain without insurance protection despite the island’s continued exposure to hurricanes, flooding and earthquakes.
While approximately 40 000 homes currently carry insurance coverage, a significant number remain uninsured for a variety of reasons, said the General Insurance Association of Barbados (GIAB), responding to questions from Barbados TODAY.
“Property owners should not only be concerned during [a] hurricane.
“Barbados faces multiple natural hazards, including earthquakes and floods. Even moderate events can result in costly damage. Insurance is a critical financial safeguard for both individuals and the wider economy.”
According to the GIAB, some homeowners choose to self-insure, while other properties do not meet underwriting requirements because of their construction type or condition. The association also noted that insurance is generally mandatory for mortgaged properties, meaning coverage is often closely linked to financing arrangements.
It is urging homeowners to review their insurance or seek coverage before disaster strikes rather than after.
The industry’s warning comes days after Minister of Economic Affairs Marsha Caddle called for wider insurance coverage across sectors such as housing and agriculture, arguing that Barbados remains vulnerable because too many financial losses ultimately fall to the state.
Speaking on the Protection of Depositors Bill in Parliament earlier this week, Caddle said while deposit insurance for credit union members represented an important milestone, Barbados also needed to address insurance gaps affecting homeowners, farmers and other sectors vulnerable to natural disasters.
She argued that countries with greater insurance penetration are generally better equipped to recover after disasters because more of the financial burden is absorbed by insurers rather than governments.
The damage caused by recent storms underscores why insurance should not be viewed as optional, GIAB said.
Approximately 240 residential and commercial properties were damaged during Hurricane Beryl, while Hurricane Elsa affected about 1 100 properties.
“The majority of these were partial rather than total losses,” GIAB said.
“This highlights the fact that even without destruction, widespread damage still creates significant financial strain if properties are uninsured.”
Recognising that affordability remains a concern for some homeowners, GIAB pointed to basic insurance products that can provide an affordable starting point.
It noted that a fire-only policy covering a timber house valued at $50 000 costs about $150 a year.
“We encourage homeowners to explore these options as a starting point,” the association said.
GIAB also encouraged homeowners to strengthen their properties against severe weather, noting that insurers take construction standards, roof strength and mitigation measures into account when assessing risk and setting premiums.
It advised homeowners to invest in retrofitting their properties and to ensure any construction work complies with the Barbados Building Code.
While coverage remains available for beachfront properties, considered to be higher-risk, GIAB said those locations may be subject to stricter underwriting because of their increased exposure to storm surge, flooding and wind damage.
“These considerations reflect the increased exposure to storm surge, flooding, and wind damage.”
GIAB maintained that closing the insurance protection gap would require cooperation among homeowners, insurers, financial institutions and policymakers.
“Insurance is not just a financial product. It is a cornerstone of national resilience.”
The association added that improving the country’s resilience will require “continued collaboration across stakeholders, including homeowners, insurers, financial institutions, and policymakers”, as Barbados continues to confront the increasing risks posed by natural hazards.
(SM)
