Insurers say although private residents experience devastating floods, the majority of policyholders with flood coverage come from medium and large businesses.
Recent flooding as a result of heavy rainfall, poor drainage and irrigation has caused many households and poultry businesses to suffer great losses.
Rishi Singh, vice president/marketing manager of the Guyana Fire, Life and General Insurance (Guyflag) says in most cases flood coverage is recommended for lower flat occupants because these homes are exposed to flooding.
On the other hand, upper flat residences may not need the coverage because of their height, except in instances where homes may be located by the seashore and are susceptible to flooding from tidal waves.
Coverage will include items that rest on the floor of the home such as carpets, floor model television sets etc., says Singh.
Persons living in areas prone to flooding will have to pay higher premiums for flood insurance compared to low risk areas.
He called on more private citizens to obtain flood insurance since 75% of those insured are corporate businesses and many small businesses are not covered. Singh notes that a belief is that insurers do not pay claims but the recent payment of large claims to insured fire victims is testimony that insurers do pay.
For private persons an inspection is done of the premises before they can qualify for the coverage. For example, a home must have proper drainage and the yard must reach a certain density. The premiums for wooden buildings may also be higher than for concrete ones.
Requirements for flood coverage of businesses include 18-inch high storage for stocks. Some businesses tend not to qualify for coverage because they do not meet the storage requirement.
Private residences as well as businesses usually have an insurance package which includes fire, lightening, explosion, riot, strike and malicious damage but flood coverage can also be included if the requirements for the coverage are met.
Singh says further that for fire, lightening, explosion, riot, strike, and malicious damage a flat rate of $3.50 per $1,000 may be the rate plus an additional 50 cents or one dollar per $1,000 for the flood coverage. However, he cautions that the rates are fixed and are based upon an assessment of the premises.
He calculates that coverage for a concrete home worth $2.5M will be below $9000 annually and a wooden home for the same valued under $12,000 annually.
Chaitram Jattan, of the fire insurance department at Demerara Mutual Life Group of Companies says persons have a choice and can choose flood insurance alone or have a package that includes the other coverage offered such as fire, lightening etc., but the rates for flood insurance will depend on how prone the area is to flooding and the construction of the building.
Officials from John Fernandes Insurance Services Ltd., stated that they do not offer flood insurance. A manager from the company was not available to say why the company stopped offering this service.
Officials from the North American Fire and General Insurance Co., Ltd., and Hand-in-Hand Mutual Fire & Life Insurance Co., noted that they offer flood coverage as part of a fire insurance package and do not offer the coverage separately.
Howard Cox, the fire manager at Hand-in-Hand explained that many persons do not ask for flood coverage but for fire, lightening, riot or strike. Cox adds that large businesses will more likely buy insurance coverage for floods.
Hand-in-Hand also provides coverage for malicious damage, explosion(in the event that a gas bottle explodes), aircraft damage, vehicle impact etc.
He explained that their rates are not fixed and in the case of flood coverage areas prone to floods will have higher rates.