“Pay close attention to the deductible/excess clause of your insurance policy”, says Sagicor

April 13, 2022

Barbadians are being encouraged to pay closer attention to the deductible/excess clause of their general insurance policy contracts and avoid unexpected surprises when the time comes for them to make a claim following unforeseen damage or destruction to their property or vehicle. 

This advice comes from Mark Prescott, Vice President of Insurance Operations at Sagicor General Insurance Inc (SGI), who noted that they have seen too many examples of policyholders being caught off-guard when they are reminded of this aspect of their policy during the claims process. “In most instances it was clear that the policyholders may have overlooked this clause or did not have a complete understanding of their policy, particularly with respect to this element”, Prescott stated. He therefore urged Policyholders to engage their insurers on this subject.

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”, Prescott explained. 

With respect to property insurance, the Vice President stated that this deductible/excess amount for losses resulting from natural catastrophes is calculated at 2% of the sum insured, which is the amount that the property is insured for. “If a property is insured for $400,000, 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.” 

“What we have seen several times in the past, is when individuals make a claim on their property insurance following damage caused by a storm, or other natural disasters, they either don’t recall are not aware of this percentage amount and therefore don’t anticipate the 2% being subtracted from their settlement figure”, said Prescott. “Where this 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 it. 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, he explained that if you insure only 70% of the rebuild cost, your repair claim will be paid in like manner. 

The veteran 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”, Prescott 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 anyone of the company’s team of knowledgeable representatives using one of many options, such as dialing 431-2800, sending a WhatsApp message to 467-7243, emailing [email protected] , or connecting via SGI’s Instagram and Facebook pages.