HURRICANE Melissa has not only caused widespread physical damage across western Jamaica but has also exposed a deeper financial weakness: the lack of property insurance and the growing problem of underinsurance among homeowners. The Insurance Company of the West Indies (ICWI) has so far received 15 claims, with more expected in the coming weeks as residents continue to assess their losses. However, the company anticipates that many policyholders will face an uncomfortable reality that their existing coverage will not be enough to rebuild.

“The shame that I think we’re going to have in this experience is going to be that a lot of people who do have insurance may not have enough insurance. I think that’s going to be a problem,” said Paul Lalor, president of ICWI, in an interview with the Jamaica Observer on Friday.

Despite repeated efforts by insurers to get homeowners to update their policies, Lalor said the take-up has been low, which means many have not been keeping policies up-to-date to reflect rising construction costs. He recommends that homeowners increase their insured sums by five to 10 per cent each year to keep pace with inflation and the rising cost of materials.

“If you have the same value for your house for a period of time and you know that inflation is between four and six per cent every year, if you just took the value from the last time and increased the value by four or six [per cent] over that number of years, you would then be able to work out how underinsured you were,” he explained.

LALOR… the shame that I think we’re going to have in this experience is going to be that a lot of people who do have insurance may not have enough insurance. I think that’s going to be a problem

Beyond the issue of underinsurance lies an even greater concern. Many households have no coverage at all, not because of reluctance, but because of ownership complications that prevent families from insuring their homes. In many communities across rural and western Jamaica, families have shared inherited property, each person building a home on a portion of the land without formal documentation. While this tradition has offered stability and connection, it has also created long-standing barriers to obtaining insurance coverage. Lalor noted that it is better for individuals planning to build on family land to formalise ownership before construction begins. This can be done through subdivision.

“If the land is passed through generations of families who have not had a will, it’s important to determine who the actual beneficiaries are and to generate a formal title in some way so that ownership of the land is clear. That way, when you invest in building a house, you know that investment will be deemed in law to be yours,” he said.

He explained that when family members build homes on shared land, the most practical solution is to formally subdivide the property and issue titles to each person. This prevents future disputes and ensures that each homeowner has legal ownership of the land beneath their house. Without subdivision, selling becomes difficult, since no buyer would purchase a house that does not come with titled land. Alternatively, the main landowner can insure all the houses on the property, but this only works if ownership is clear. In many cases, especially when land is inherited by several relatives, disagreements over who has authority to insure create confusion and make coverage difficult to arrange. Changing insurance laws to fit Jamaica’s family land culture would be difficult because it raises complex legal issues. Under current law, the right to claim insurance benefits is tied to the legal owner of the land. This means that if someone builds a house on family property without having their name on the title, any insurance payout could be contested. In such a case, the landowner could take the matter to court, arguing that the money rightfully belongs to them since the structure sits on their land. This creates a legal conflict that could force insurers into a position where they risk paying twice, once to the person who built the home and again to the landowner. As a result, the industry cannot simply adjust its rules without reforming the broader property laws that define ownership and rights on family land. Lalor also raised concern about the tendency of some homeowners to cancel their property insurance once their mortgage is paid off. He explained that while this may seem like a way to save money, it leaves their most valuable asset unprotected. With improved cash flow after clearing a mortgage, homeowners are in an even better position to maintain coverage and safeguard their investment.

“You are better off; your cash flow is better by the amount of the principal and interest, so keep paying the insurance amount and protect yourself. The most valuable asset you will ever buy is your home,” he stressed.

Although many people remain sceptical about insurance, often viewing it as a long-term scam, Lalor explained that the system operates as a shared pool of funds. Each policyholder contributes a small portion of their property’s value each year, and those collective contributions are used to help individuals who suffer losses from events such as fires or hurricanes. Even if one person never makes a claim, their payments support others in need, and the same protection is available to them should disaster strike.

“In most cases, if you were to lose a house, it would be between 100 and 150 years, depending on the price, for you to have spent as much money on insurance premiums as the value of the house,” he explained to the Sunday Finance.

He further explained that never having made a claim should not be a reason to stop protecting oneself. This, he said, is the essence of risk management.

“Sometimes the risk never happens, but sometimes when it does, you’re happy that you did it,” he said.

ICWI acknowledged that many people are still in shock and that filing claims may not yet be a priority as families work to adjust to their new living situations. The company has therefore adopted a flexible approach, allowing additional time for affected clients to submit their claims, which are expected to continue well into next year. Lalor said the company is fully prepared to assist customers across the affected parishes, with representatives already stationed in Savanna-la-Mar and Falmouth to help process claims. While some branches are still without electricity or mobile service, he noted that staff members are doing their best to support clients and ensure that claim forms are available, including for those whose motor insurance policies are about to expire.