Although the assessment is still being conducted, insurance companies here have not ruled out the possibility that they could be forced to raise their insurance premiums because of the devastation left by Hurricane Charley, one of the most expensive natural disasters in the last 10 years.
Charley, a category four storm that lashed parts of South Florida and the Carolinas on the weekend, is estimated to have left behind a trail of damage estimated to be between $5 billion and $15 billion.
The Bahamas escaped unruffled.
Already there are anxieties here and abroad that insurance companies abroad could be forced to raise their premiums to recover the billions of dollars in losses that they are expected to incur because of Hurricane Charley.
But according to the Bahamas Insurance Brokers Association [BIBA], which moved to offer its regrets for the resulting deaths and damage, that kind of conclusion is premature.
Charleyﾴs impact is second only to Hurricane Andrew in 1992.
ﾓAfter 1992, both the availability and the cost of property insurance in the Bahamas were dramatically affected,ﾒ noted the BIBA in a press statement. ﾓThe BIBA hopes that this will not be the case this time, but it is too early to tell, since we are not yet even halfway through the 2004 Hurricane Season.ﾒ
Just recently, top hurricane forecaster, Professor William Gray, slightly revised his original prediction for the number of tropical storms in the Atlantic and the Caribbean this year, which is still expected to be a normal season.
Mr. Grayﾴs amended outlook came a few days after the season’s first hurricane, Alex, grazed the coast of North Carolina. He now expects 13 tropical storms to form. He had predicted in May that there would be 14 tropical storms.
Mr. Gray said seven of the 13 would become hurricanes, and of those, three would become powerful Category 3 or higher hurricanes with winds of more than 111 mph.
Although they are still conducting assessments, some re-insurers abroad are already predicting increased property insurance as a result of the storm. Others have warned that they will be seeking higher premiums to cover their losses from Charley.
Traditionally, after a major storm, hurricane insurance premiums tend to be hiked. The increase is due to claims that are made.
ﾓIf we have several consecutive years where we do not have hurricanes, as in 2002 and 2003, you will find there is a gradual decline in the rate,ﾒ said Gregory Ritchie, managing director of Advantage Insurance Company.
After Hurricane Michelle in 2001, the local insurance industry paid out well over $100 million in total claims, according to official figures.
With the immense damages that Hurricane Charley left, many people are fearful that history will repeat itself.
As for the grouping of insurance professionals here, they are using the opportunity to caution Bahamians to secure adequate hurricane insurance arranged through a licensed insurance broker.
ﾓCharley has again demonstrated that forecasting is not an exact science; either for the exact direction of for the intensity of a tropical storm. It is always prudent to err on the side of caution and prepare for the worst,ﾒ the BIBA statement said.
ﾓProperty can be replaced, but life cannot.ﾒ
The death toll in Florida rose by one Monday to at least 17, and officials estimated that the storm caused $11 billion in damage to insured homes alone. Charley also killed four people in Cuba and one other in Jamaica.
While Floridians were coming to grips with their immense misfortune on Monday, there were fears that Mother Nature could unleash its fury once again on Florida as two burgeoning storms churned off the U.S. coast.
Tropical Storm Earl was downgraded to an open tropical wave Monday as it swirled in the Caribbean, the U.S. National Hurricane Center said. Forecasters said that Earl could gather strength later in the week but that it would likely keep well south of Florida and possibly head for Mexico.
Hurricane Danielle, meanwhile, was maintaining its strength 915 miles northwest of the Cape Verde Islands, but posed no immediate threat to land.
Tameka Lundy, The Bahama Journal
