Homeowners in USVI Struggle to Secure Insurance Amid Rising Risks

Glendina Matthew, director of the Division of Banking, Insurance and Financial Regulation, explains how Hurricanes Irma and Maria contributed to a hard insurance market in the Virgin Islands, leading to premium increases and limited coverage options

Recent adverse weather events have made it difficult for homeowners attempting to secure housing insurance in the Virgin Islands. That’s according to Glendina Matthew, director of the Division of Banking, Insurance and Financial Regulation in the Office of the Lieutenant Governor.

On Monday, she told members of the Committee on Housing, Transportation, and Telecommunications that, “As a result of catastrophic events such as Hurricane Irma and Maria …reinsurers have been declining and limiting the amount and type of risk they will undertake.” It’s a decision that has “limited insurers ability to write new and renewal coverage.” Sharing startling figures, Ms. Matthew told lawmakers that Hurricanes Irma and Maria cost the insurance industry $179 billion, all told.

These events have contributed to what insurance experts refer to as a hard market condition, which “typically occurs in response to a major external event.” In such cases, rates rise, coverage may be more difficult to find, and insurer reserve increases, Ms. Matthew explained. “Increased reinsurance costs, less competition, poor investment returns, [and] inflation,” can all contribute to a hard market. Virgin Islanders are already well aware of those challenges.