Consumers could pay out more for insurance coverage this year, according to the head of one of the Island?s leading firms.

In particular, domestic insurance rates for property and contents, auto, marine and health coverage could all be going up ? albeit to varying degrees, said BF&M CEO Glenn Titterton.

And he attributed an increase in premiums ? which could range up to 25 percent, in the case of motor vehicle insurance ? to the cost from damage after last September?s devastation in Hurricane Fabian as well as a general increase in the cost of goods and services locally.

Both factors were cited as having pushed up insurers? costs making it necessary to pass on higher rates to consumers renewing policies this year.

But Mr. Titterton told The Royal Gazette this week that consumers could take an active role in ensuring that insurance rates increases could be limited in the long term if there was an active effort to make every effort to get a fair price for local services.

Mr. Titterton spoke to rate increases after Gerald Simons, CEO of rival company Argus Insurance, told The Bermuda Sun in recent weeks that there could be double digit increases (with Mr. Simons saying standard premiums could jump 12 percent) on health insurance.

Mr. Titterton said: ?With health coverage there is a suggestion of double digit (or more than ten percent) increases, but I suspect this would be more for groups with high loss experiences.

?Certainly as far as this company is concerned, rate increases depend on what loss experience has been. For health care, costs have in general gone up and there are really two factors. One is that the cost of health care has increased and secondly, is usage; people are using (medical services) much more than ever before. For us, as insurers paying the cost, this makes it a double whammy.?

Mr. Titterton said health care premium increases are expected to vary widely, based on loss experience. He stressed that those with ?good? loss experiences may experience little shift in coverage costs, while other groups with high use of the policy, could be hit by paying more for their insurance policies.

?If a group had good loss experience (a reasonable level, rather than high level, of health policy claims) their increase might be contained between zero to three percent.?

Although insurance increases are never easy to stomach, Mr. Titterton called on consumers to consider the reasons behind rates going up.

He said that consumers had a ?buffer zone? with insurance, because the cost of their medical bills, or car repair for example were paid.

But if the consumer first thought about how he might get a better price, that could help control insurance costs at the end of the day.

On the medical side he said patients could ask about alternate treatments, or if a generic prescription drug may be a cheaper alternative to the name brand subscribed.

?Medical costs are high, but I am not sure if people realise how high,? he said, and added that there was a political element in that Government set pay rates for the hospital. He added that no one was asking for care providers to be paid too little, but that the public should be aware of what happens and ensure that medical costs were contained as much as was reasonably possible. As an example of how high health care costs can be, Mr. Titterton said that the nursing of a premature child routinely came with a price tag of $500,000. And he said people were also living longer, meaning that there were more people seeking medical care over a longer period which also pushed up costs.

?This is all good stuff. It is the right thing that we should be able to save a premature baby (which can now survive from a low birth rate) and that people live longer, but consumers must also understand that there is a bill attached.?

Along property lines, insurance increases are likely to be between three and five percent for residential clients insuring their properties or home contents, and commercial building insurance rates could see a more significant hike ? in the region of five to ten percent.

He said that property insurance increases could largely be attributed to Fabian ? with the category three storm costing, by his estimate, up to $225 million ? but that a spike in construction costs was also to blame for increases to the consumer.

?To a large extent we are subject to the pressures of the international reinsurance market who expect a certain rate of return after a catastrophe. And they will certainly be expecting a pay back period for something like Hurricane Fabian,? he explained.

In addition, the company has seen a definite increase in what they are paying out for repairs as builders have reportedly upped what they charge in this booming market.

?The consumer is being charged more and we are faced with these rising building costs. There are not enough builders and it is a building boom. There are more projects than builders can handle so they feel justified in charging more. I am not pointing a finger, but the increase does get reflected in the premium rate,? he said.

Although Mr. Titterton said he was speaking specifically of the range of rate increases that BF&M clients might see, he said he would not expect the rates from other domestic insurers to be ?terribly dissimilar?.

Car and boat owners should also expect to pay more for coverage, and he said, for similar reasons. First of all, Mr. Titterton said there had been significant damage during Fabian to both cars and boats. In like fashion, the company has seen a surge in repair costs from garages and boatyards.

?This varies from insurer to insurer but motor rates could range as high as 25 percent. I speaking mostly of cars, and less in the case of commercial vehicles.? He said commercial vehicles seemed to sustain less damage. Mr. Titterton noted that the increases had to be put in place with the company having lost $1.6 million from its motor insurance business last year.

?If you write a class of business and you lose money, you have to do something. And the loss was just from the (increased) cost of fixing vehicles. In some years there could be a big liability claim, but that was not the case last year. It was simply premium did not keep pace with repairs.?

On the marine side, rates are also expected to go up. In addition, consumers may find that the terms and conditions of coverage are tighter.

For example, canvas sales and other boat items such as bimini canvas will now be excluded from policies. The shift in policy follows the company having to pay out significantly for canvas items after Fabian. ?We will not be able to insure canvas, which was shredded left right and centre in the storm. The number of cases was just phenomenal. We learned a lesson,? he said adding that a boat owner, given notice of a storm, is able to take responsibility for taking down sails, boom covers and biminis beforehand.

Moorings will also have to be inspected annually now, instead of once every two years as was required in the past.

Mr. Titterton concluded: ?I would strongly make the point that insurance premiums are only reflective of the costs in the environment. To some extent insurers are playing catch up with what has already happened in the general economy and community.? He called for consumers to ?find a way collectively to limit costs. It is in the interest of Bermuda that this be got under control. If costs go up, insurance goes up.?