Insurance claims continue to mount following Hurricane Fabian's romp across Bermuda - but some shocked residents have discovered not all their damages are covered by their policies.

Several gaps and loopholes in insurance packages might leave home and boat owners facing unexpected out-of-pocket expenses in order to bring their properties and belongings back to pre-hurricane states.

CEO and president of BF&M Insurance, the Island's largest local insurer, Glenn Titterton said many people had insufficient coverage either by choice or financial necessity, and Fabian had delivered some hard blows.

The most common, post-hurricane scenarios - in which people may discover their policies are not meeting their true needs - relate to those who did not buy contents insurance for their homes, chose to under-insure their homes, or, through actions considered “irresponsible” by insurers, left property such as cars or boats in unnecessary danger.

Of the three possible scenarios, failure to buy contents insurance was the easiest to explain to customers but could often apply to the most saddening situations, The Royal Gazette was told.

“Really, there are a number of issues,” Mr. Titterton said. “There are an awful lot of people who have, consciously or unconsciously, elected not to insure their home's contents.”

These people had home insurance, normally because it was required by their mortgage company, he said, but had chosen not to insure contents, often as a cost-saving measure.

But with homes devastated both inside and outside by Hurricane Fabian on September 5, many of those who opted out of contents insurance coverage have been doubly hit.

“It is very sad really,” said Mr. Titterton. “Sometimes financial constraints are the reason people have chosen not to insure for contents.

“But then these are also the people who are not in a position to replace their contents if they are damaged.”

He added: “In the end it is one of the biggest uninsured problems that we have. It is a very sad situation.

“Hardship cases are very difficult.

“It may be a very modest dwelling but people are proud of the contents which they have collected over a number of years.”

Many have lost considerable amounts of their valuables without any insurance coverage to hedge the financial blow of the loss.

Another common gap on insurance coverage which has led to problems, Mr. Titterton said, occurs when a homeowner chooses to purposely underinsure their property in order to pay lower premiums.

“Ideally, we would like a trouble-free claim which is insured adequately,” said Mr. Titterton but often that is not the case.

For example, a homeowner may have a property valued at $500,000 but only have that property insured for $50,000 because that is what is left on their mortgage.

But, if that home then sustained $20,000 damage, the homeowner would not receive $20,000 in insurance reimbursement, rather only the same percentage of the claim that they are in fact paying their premium for.

In the case of the example, only ten percent - of $2,000 - of their $20,000 claim would be paid.

Mr. Titterton said this was problematic only when a home-owner had grossly understated the value of their home.

“You cannot transfer a $500,000 risk to an insurer for premiums on a $50,000 policy,” he said.

While, generally, no two assessors will agree exactly on the value of a property, the important thing is that when the insurance company's assessor looks at the home, the stated value it is determined to be is at least “in the ballpark” of the home's actual value.

“We do not split hairs,” Mr. Titterton said. “It is not a precise thing, as long as it is in the right ballpark, the claim will go ahead.”

A final problem many have faced - particularly boat owners but also some car owners - has been to submit a claim and then discover that insurance on their prize possession may not apply, if it is believed they did not make sufficient efforts to protect their belongings prior to the storm.

In terms of boats, “a gap might arise if they have not taken care of the vessel,” said Mr. Titterton.

“For example, if they haven't had their mooring inspected, or if they failed to move their vessel to a storm mooring.” Generally, moorings must be inspected once every two years, he said. “There is a degree of care which comes into play if an owner hasn't been prudent.”

An insurance claim can also be scuppered if assessors determine that a boat - or an automobile - was placed in harm's way by the owner, or that due care was not taken to protect it from the hurricane.

“The insurance company would take the position, in these extremes, that they do not want to pay the claim,” Mr. Titterton said.

One woman, who contacted The Royal Gazette but refused to leave her name, said she had learned about this condition the hard way.

“Local insurance companies - and I know this is true of BF&M - are denying coverage to cars left at the airport during the week of the hurricane,” she said.

“They are saying it was irresponsible for people to park at the airport.”

The woman said she believed, in a storm like Hurricane Fabian, “there is no safe place to leave your car but this is precisely what you buy insurance for.”

Mr. Titterton told The Royal Gazette he could not accurately estimate what percentage of claims had been affected by gaps or loopholes in insurance coverage but problems were not uncommon.

All had been evident in the tumultuous days since the hurricane, but most could have been avoided had insurance customers been more well versed in the details of their policies, The Royal Gazette was told.

Mr. Titterton said insurance companies regularly sent bulletins to their customers to make them aware of various insurance regulations and needs in order to be best protected.

Also, those working with accountants, were generally apprised of what coverage was needed in detail.

“One would have to miss or ignore all manner of advice to get into these situations,” he said.