Home Insurance Premiums Jump 30-40 Per Cent in 2023 as Only 20 Per Cent of Jamaican Homeowners Have Coverage

Kingston, Jamaica — 5 December 2024

Jamaica’s home insurance market experienced a watershed year in 2023, with premiums rising between 30 and 40 per cent for residential policies and between 60 and 70 per cent for commercial properties. The increases follow years of reinsurance market hardening driven by global climate-related claims, and they have arrived at a moment when the Insurance Association of Jamaica estimates that only approximately 20 per cent of Jamaican homeowners carry property insurance. The combination — sharply rising costs for those already covered, and the vast majority of owners unprotected — represents one of the most underappreciated risks in Jamaica’s housing market.

Jamaica’s risk profile justifies insurance. The island sits in an active hurricane zone, is seismically active, and experiences significant annual flooding and landslide risk in hilly and low-lying areas alike. A homeowner without property insurance who loses their home to a hurricane is not just homeless — they lose their primary asset with no path to replacement beyond emergency relief. The 80 per cent of Jamaican homeowners who carry no insurance are exposed to exactly this outcome with every major weather event that passes through the region.

What Comprehensive Home Insurance Covers

Standard home insurance policies in Jamaica cover the structure of the property against fire, hurricane, earthquake, flooding, and theft. The NHT provides a Blanket Houseowner’s Comprehensive Policy through its mortgagor programme that is an all-inclusive product covering fire, hurricanes, earthquakes, and flooding, with additional liability coverage including public liability and personal accident insurance. For NHT mortgagors, this insurance is part of the mortgage package and is not optional.

For homeowners outside the NHT mortgage programme, insurance is typically available from JN General Insurance, Scotia General Insurance, and other market participants at premiums calibrated to the property’s rebuild value rather than its market price. Jamaican homeowners typically pay between 1 and 2 per cent of rebuild value annually. For a home with a rebuild value of US$200,000 — a modest figure for a quality concrete residential structure — that translates to US$2,000 to US$4,000 per year, or approximately J$310,000 to J$620,000 at current exchange rates.

Why the Coverage Gap Is So Large

The 80 per cent without insurance are not primarily risk-tolerant. They are cost-sensitive. For a household earning $150,000 per month and servicing a mortgage, adding a six-figure annual insurance premium to the monthly budget is genuinely difficult. The 30 to 40 per cent premium increases of 2023 have made the affordability problem worse, pushing coverage further out of reach for households already stretched thin. The global reinsurance market’s response to climate-related losses — passing higher costs to primary insurers, who pass them to policyholders — is widening the protection gap in Jamaica as in much of the Caribbean.

The coverage gap is also partly cultural. In communities where most neighbours are uninsured, the normalisation of going without insurance reduces the perceived urgency of purchasing it. Until a major storm event creates visceral, visible loss, the argument for insurance can feel abstract.

“The 20 per cent insurance penetration figure is one of the most alarming statistics in Jamaica’s housing market,” said Dean Jones, Managing Director of Jamaica Homes. “Jamaica is a hurricane-prone island and only one in five homeowners is insured. The 2023 premium increases will push more people out of coverage, not into it. There is a genuine policy argument for exploring mandatory insurance for mortgaged properties, and for government-subsidised catastrophe coverage for low-income homeowners who simply cannot afford market premiums. Jamaica cannot afford to have 80 per cent of its housing stock unprotected.”

What Homeowners Should Prioritise

Homeowners who cannot afford comprehensive cover should at minimum carry fire and hurricane cover, the two perils most likely to produce total loss. Partial cover is better than no cover. Homeowners should also ensure they understand the difference between market value and rebuild value when selecting a sum insured: insuring at market value for a house in a rising property market will typically over-insure, while insuring at rebuild cost — the actual cost of reconstructing the structure — produces the correct sum insured for a buildings policy.

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