Updated property valuations key following unforeseen disasters

April 12, 2022
Updating your property value and market value of your possessions is critical to ensuring a smooth process, especially after suffering an unforeseen disaster or event. 

These words of advice came from Dexter Mc Knight, vice president, insurance operations, for Sagicor General Insurance Inc, as he advised policyholders that they should always supply an accurate valuation for their property and their contents, whenever reviewing and renewing their insurance policies. 

Mc Knight stated that these updated valuations are not only used to determine the accurate premium rate for the upcoming year of coverage, but also to determine the rebuild or replacement value of the property or personal possession and to ensure that property owners can maintain the same or similar standard of living prior to the disaster. 

“If a property is insured for TT$300,000, for example, but the actual cost to replace it based on the current rebuilding costs is TT$400,000, then it places the policyholder at a disadvantage should they suffer the unfortunate experience of losing their home to a natural disaster or some other unforeseen event, such as a fire,” said Mc Knight. “This is why we focus on educating our policyholders and stress to them the importance of updating the rebuilding cost and market value of their contents on a regular basis so they do not have added stress during what can be an already stressful period.”  

Mc Knight, who supports Sagicor General’s insurance operations in Trinidad and Tobago, raised the concern that the company has seen examples of individuals choosing to insure their possessions at a lower value to save money. However, he cautioned policyholders against this, arguing that it isn’t worth the risk, especially after looking at the events in the Caribbean for the past two years, with floods and landslides in Trinidad and Tobago, the eruption of La Soufriere volcano in St Vincent, and the first hurricane to hit Barbados in 60 years. 

“When it comes to property, more often than not we can see that building costs tend to increase, therefore if your insurance premium is based on an outdated valuation, the settlement you would receive would be in line with the valuation provided and thus likely to be less than what it would cost to rebuild,” he stated. “The same principles can apply to contents insurance with the fluctuating value of electronics, jewellery, furniture, appliances and other personal possessions.”