Insurance Coverage Options Paper and Strategy
A Climate-Resilient Marine Spatial Plan will guide the protection and sustainable use of the Virgin Islands’ marine environment. It will define key zones for conservation, fisheries, recreation, and development—supporting climate resilience while enabling a balanced blue economy.
Introduction
Climate change is having a direct impact on the affordability and availability of insurance in disaster prone regions across the world. The Caribbean is considered the second most disaster-prone region in the world, and The Virgin Islands’ location within the region makes it particularly prone to hurricane strikes.
Home insurance rates more than doubled in the aftermath of record-breaking category 5 Hurricane Irma which directly hit the Territory in September 2017. Further increases in insurance rates could lead to many properties being under-insured or un-insured. There is a risk that the Territory as a whole could be become an uninsurable jurisdiction.
Increasing climate risks may also be expressed in increased interest rates for construction loans and mortgages. Together, these work to drive up the cost of housing and living.
The Impact
This project will produce an Options Paper and Strategy addressing insurance coverage from an accessibility and affordability perceptive. The goal is for insurance premiums to remain affordable and for The Virgin Islands and other Caribbean UK Overseas Territories to not become uninsurable jurisdictions.
In delivering the Strategy to ensure this, all options will be explored, including premium subsidies via the incipient United Kingdom Overseas Territories Climate Finance Support Programme or other sustainable financing mechanisms.
The project delivery will facilitate the formation of an Overseas Territories Task Force / Expert Technical Working Group to help explore and assess all options.
The Problem
Central Commerical District, Road Town, Tortola
The Solution
Graphic presenting a plan of reducing insurance premiums
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