When Insurance Loses the Nation’s Trust

Prime Minister Dr Andrew Holness has placed an uncomfortable question before Jamaica’s insurance industry: what is the value of property insurance if, after the catastrophe it was purchased to guard against, policyholders are still waiting for their money almost a year later?

Hurricane Melissa struck Jamaica on October 28, 2025. By September 2026, homeowners and businesses were still reporting unsettled claims. Holness said the slow pace of payments was obstructing private-sector recovery and warned that Parliament might have to intervene.That warning goes beyond a disagreement about paperwork. It reaches directly into Jamaica’s already fragile relationship with property insurance. Reliable, current national data on home-insurance coverage remain limited. The 2021 Jamaica Survey of Living Conditions reportedly found that only 6.3 per cent of Jamaicans had home insurance, while the Insurance Association of Jamaica stated in 2025 that approximately 20 per cent of residential properties were insured.

These figures measure different things and should not be treated as directly interchangeable. The association also estimated that 95 per cent of insured residential properties were inadequately covered. No comparable national assessment has yet established whether coverage increased or declined after Hurricane Melissa.

Even so, every available estimate points towards a serious protection gap. A large majority of Jamaican homes appear to have no formal insurance, while many of those carrying policies may not be insured for the full cost of rebuilding.

Melissa should have demonstrated why insurance matters. Instead, the prolonged claims controversy risks convincing thousands of Jamaicans that insurance is expensive, complicated and unreliable precisely when it is needed most.

A Dangerous Vote of No Confidence

Across Jamaica, particularly among mortgage-free homeowners and retirees, a familiar argument can be heard. Rather than paying an insurance company every year, set aside the equivalent of the premium in a private savings account. If a roof is damaged, a pipe bursts or repairs become necessary, use the accumulated money.

The approach is sometimes described as self-insurance. For a minor leak or a few damaged windows, it can appear sensible. For the loss of an entire house, it can collapse immediately.

Saving 10 per cent of an annual premium is not enough. Even saving the whole premium every year may take decades to accumulate the cost of rebuilding a concrete home. A Category 5 hurricane can remove in hours what a family spent a lifetime constructing.

Yet the argument survives because it is not based solely on mathematics. It is based on trust.

A homeowner who pays premiums for 15 years and then spends eleven months pursuing a claim may reasonably ask whether the arrangement delivered the security that was promised. A neighbour watching that struggle may decide not to purchase insurance at all.

This is how an insurance protection gap grows. It does not grow only because households cannot afford premiums. It also grows because people cease to believe that the product will perform.

Jamaica Is Starting From a Perilous Position

The country’s exposure was already severe. Hurricane Melissa damaged an estimated 192,000 buildings, while catastrophe modeller Verisk initially placed insured losses at between US$2.2 billion and US$4.2 billion.

The total economic loss was considerably greater, demonstrating how much property and economic activity sat outside conventional insurance protection. The situation in Black River illustrates the problem at street level. A business survey commissioned by the St Elizabeth Homecoming Foundation reportedly found that only 1.4 per cent of the businesses surveyed had insurance. None of the insured businesses represented in the survey had received a payout when the findings were reported.

The published account did not reveal the sample size, the number of insured respondents or whether the outstanding claims were complete, disputed or affected by underinsurance. The 1.4 per cent figure should not, therefore, be presented as the national insurance rate for Jamaican businesses.

Even with those qualifications, the message is disturbing. The survey reported dissatisfaction stretching back to Hurricane Beryl in 2024 and concluded that some business operators saw little merit in purchasing insurance because of the difficulty and time involved in securing a settlement.

An industry cannot grow by giving the uninsured more reasons to remain uninsured.

The Price Question Cannot Be Dismissed

Jamaican homeowners frequently compare local premiums with those available in Britain, Canada or the United States. Such comparisons require caution because the risks are not equivalent.

A Jamaican insurer is pricing exposure to hurricanes, earthquakes, floods, construction-cost inflation and a relatively small insurance pool. A British policy is written across a much larger and more diversified market without Jamaica’s level of tropical-cyclone exposure.

Nevertheless, the difference experienced by individual consumers can be striking.

The contrast becomes clearer when comparing similar properties, although the available Jamaican evidence remains limited. In 2021, the owner of one four-bedroom Jamaican home received a quotation of approximately £150 a month, then equivalent to about J$31,000 monthly or J$372,000 annually. More recent indicative estimates suggest that insuring a four-bedroom Jamaican home with a rebuilding value of approximately J$28 million to J$38 million could cost between J$284,000 and J$758,000 annually, or about J$24,000 to J$63,000 a month. By comparison, UK quotation data for 2026 place the median annual premium for a four-bedroom home at approximately £272, equivalent to about J$58,000 annually or J$4,800 a month at current exchange rates.

These are not perfectly comparable products or national averages. Premiums vary according to rebuilding value, location, construction type, previous claims, deductibles and the extent of hurricane, earthquake, contents and accidental-damage coverage. The difference nevertheless illustrates why comprehensive property insurance can feel financially inaccessible to mortgage-free Jamaican homeowners.

There is no authoritative public dataset establishing one average Jamaican household premium that can be compared fairly with the UK figure. It would, therefore, be unsafe to declare that Jamaican insurance is universally three, four or ten times more expensive.

The absence of transparent pricing information is itself part of the problem. Consumers need accessible examples showing what it costs to insure typical Jamaican homes of different sizes, what each policy includes and what deductible would apply after a hurricane.

When “Insured” Does Not Mean Fully Protected

Cost is only one concern. Policy language can be difficult for ordinary consumers to interpret.

Condominium owners face a particular challenge. A strata or condominium corporation may insure the building, roof and common areas, while an individual owner’s policy may cover contents, improvements, personal liability or certain parts of the unit. A person can purchase insurance believing the entire property is protected, only to discover after a loss that responsibility is divided among the unit owner’s policy, the corporation’s master policy and the condominium’s governing documents. The answer is not to identify or condemn a provider based on one experience. Coverage depends on the contract purchased. The broader lesson is that exclusions and divisions of responsibility must be made unmistakably clear before payment is accepted.

Underinsurance creates another shock. Jamaican policies commonly use an average clause. If a home is insured for less than its actual replacement cost, the insurer may reduce even a partial claim proportionately. A house with a true rebuilding cost of J$40 million but insured for J$20 million is only 50 per cent covered. A J$4 million eligible loss may, therefore, produce a payment of approximately J$2 million before the deductible and other adjustments are considered.

Some Jamaican home-insurance policies require the sum insured to represent at least 85 per cent of the property’s full replacement cost to avoid the application of an average clause.

Market value and rebuilding cost are not the same. Land may account for a substantial share of a property’s selling price, but buildings insurance is generally calculated using the estimated cost of reinstating the structure after serious damage or total loss.

These may be legitimate contractual principles, but a clause that materially reduces a family’s recovery should never arrive as a post-disaster surprise.

If an average clause can reduce a claim by hundreds of thousands or even millions of dollars, it should be displayed prominently when the policy is sold and explained again at renewal. It should not be buried in language that only becomes meaningful after somebody loses a roof.

The Industry Has Admitted That Something Went Wrong

The criticism is not simply political rhetoric.

At the Insurance Association of Jamaica’s 2026 business conference, BCIC chief executive Peter Levy distinguished between insurers’ financial strength and their claims performance. He said the companies’ balance sheets deserved high marks but acknowledged that the claims response did not. He described the industry’s inability to deliver settlements earlier as a significant failure affecting individuals, families and small businesses.

Insurers have legitimate explanations. Melissa created an extraordinary concentration of claims. There were shortages of adjusters, widespread destruction, interrupted records and disputes over building values. Larger commercial and business-interruption claims can require detailed forensic examination. Some claimants may also have submitted incomplete information. Those factors help to explain delay. They do not justify silence, uncertainty or the absence of measurable public accountability.

In August, the Financial Services Commission and industry bodies announced an objective of settling most eligible major claims by the end of September 2026, excluding complex and litigated cases.

Their public statement did not disclose how many claims remained open, how much had been paid, the total value still outstanding or how a complex claim would be defined.

A target without published numbers is difficult to test.

If 80 per cent of claims have been settled, the public should be told whether that represents 80 per cent of the number of claims or 80 per cent of their total value. Settling hundreds of smaller claims while substantial household and commercial claims remain unresolved can produce a reassuring percentage without presenting the full picture.

The industry should not be judged unfairly, but neither should policyholders be expected to rely on general assurances.

The Cost of Delay Spreads Through Property and Construction

An unpaid claim does not sit quietly in an insurer’s file.

It can leave a house without a secure roof, a commercial building closed, a contractor without work and a tenant without suitable accommodation. It can interrupt rental income, weaken loan repayments and prevent businesses from rehiring staff.

Building deterioration may also continue while the parties debate the original damage. Water enters an exposed structure, electrical systems deteriorate, mould spreads and what began as a repairable loss becomes a more expensive reconstruction project.

The delay, therefore, becomes a property-market problem, a construction problem and eventually a national economic problem.

Private insurance is supposed to transfer risk away from families and the State. When most homes remain uninsured, many insured homes are underinsured and valid claims take months to resolve, that risk returns to homeowners, relatives, charities and taxpayers.

The country then pays twice. Families pay premiums before the disaster, and the wider public pays for emergency assistance and recovery when private protection proves inadequate or unavailable.

Regulation Must Restore Confidence, Not Merely Force Speed

Parliamentary intervention should not mean ordering every claim to be paid within an arbitrary period. Some claims are genuinely complicated, fraudulent or disputed.

A credible reform programme should instead require insurers to meet defined stages:

• Prompt acknowledgement of every claim.
• A published deadline for assigning an adjuster.
• Clear notification of missing documents.
• Written explanations for prolonged investigations.
• Interim payments where part of a loss is undisputed.
• A final decision within a reasonable period or a documented reason for delay.
• Interest or financial penalties where delay is found to be unjustified.
• An independent and affordable route for resolving disputes.

The Financial Services Commission should also publish an anonymised claims dashboard showing the number and value of Melissa claims received, settled, rejected, disputed and outstanding for each insurer. Average settlement times should be included.

Transparency would allow strong performers to be distinguished from poor ones. It would also prevent the entire industry from being judged by its slowest companies.

Government intervention must also consider affordability. Requiring faster claims handling without examining premiums, deductibles, exclusions and rebuilding valuations would address only one part of the problem.

Jamaica needs a broader review of how residential property insurance is priced, sold, explained and regulated. That review should examine whether lower-cost basic catastrophe policies could be offered to mortgage-free homeowners and retirees who cannot afford comprehensive buildings-and-contents protection.

Limited cover would not solve every problem, but protection against catastrophic hurricane, earthquake and fire losses could be more valuable than leaving households entirely uninsured.

Insurance Must Become Believable Again

Jamaica does not need another campaign that simply tells homeowners to buy insurance. It needs an insurance system that homeowners can understand, afford and trust.

Policies should carry a plain-language summary showing hurricane deductibles, flood coverage, principal exclusions, the average clause and the responsibilities of condominium owners. Renewal notices should warn customers when inflation has pushed estimated rebuilding costs beyond their insured amount.

Consumers should also be told plainly what is not covered. If a policy protects the building but excludes contents, certain external structures, flood damage or parts of a condominium complex, that information should be presented before the policy is purchased.

Most importantly, claims must be handled with the urgency appropriate to a disaster.

A policy is not merely another financial product. It is a promise purchased in advance, and its true value is measured not when the premium is collected, but when disaster arrives.

If that promise becomes expensive to buy, difficult to understand and painfully slow to honour, the uninsured majority will not be persuaded to join. They will save what they can, rely on relatives, take the risk and hope the next storm passes elsewhere.

That would leave Jamaica entering every hurricane season with more valuable property, higher rebuilding costs and the same dangerously thin layer of protection.

The Prime Minister is right to demand answers. The greater challenge is ensuring that the response restores confidence before the next hurricane places the system on trial again.

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