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Property and vehicle policyholders are encouraged to review and discuss
the deductible/deductible clause of their general insurance contracts in order to better understand them in order to facilitate the processing of claims.
This advice comes from Deborah Raoul, Assistant Manager, Operations, Eastern Caribbean at Sagicor General Insurance Inc (SGI), who noted that as hurricane season approaches and people can prepare for emergencies, it is important that they clearly understand the details of this area of their policy.
Raoul said: “We work alongside our policyholders to ensure they understand this aspect of their policy as it can be easily overlooked. In many cases, individuals only pay attention to it during the claims process.
She therefore urged policyholders to engage their insurers on this to understand what their personal responsibilities would be, should the need arise to make a claim.
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A deductible/deductible is the amount of money a policyholder is responsible for in the event of an insured loss. “In other words, if a catastrophe affects your insured property or your insured vehicle is involved in an accident, the deductible/excess is the amount 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,” Raoul explained.
With respect to property insurance, the manager stated that this deductible/deductible amount for losses resulting from natural disasters is calculated at 2% of the sum insured, which is the amount for which the property is insured.
Raoul said: “If a property is insured for $400,000, for example, the deductible/excess would be $8,000, meaning if the property was damaged or destroyed, $8,000 is the amount that would be subtracted from the settlement amount paid to
“Where understanding excess becomes even more problematic is when properties have been underinsured; in other words, the owner insures the property for less than it would cost to rebuild. Accordingly, if that home were damaged by a hurricane or storm, the claim settlement would also be reduced proportionately.
As an example, she explained that if you only insure 70% of the rebuilding cost, your repair claim will be paid the same.
The experienced insurance practitioner said this is one of the reasons why Sagicor constantly reminds and encourages policyholders to insure their property at the correct rebuilding cost by obtaining an up-to-date valuation of the property upon examination and renewal of their policy.
“As far as comprehensive auto insurance coverage is concerned, there is a pre-determined deductible/excess amount that policyholders agree to when confirming their policy,” Raoul said.
“Instead of the percentage approach taken with ownership, this fixed dollar amount is what will be subtracted before the settlement is paid to a policyholder whose vehicle has been 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/deductible is waived. However, if the other party refuses to accept liability, the deductible will come into effect.
The SGI executive therefore advised policyholders to read their policy documents and ask any questions to one of the company’s knowledgeable representatives or use one of the many options, such as calling 452-0994, emailing a WhatsApp message at 1 (246) 467-7243, by emailing [email protected], or by connecting through SGI’s Instagram and Facebook pages.
Source: Sagicor General Insurance Inc. Main photo: Deborah Raoul
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