Other insurance companies are following BF&M and preparing to refuse cover for homeowners who live near the sea and are in danger of flooding after big storms.

The Royal Gazette reported yesterday that BF&M has said it will turn down homeowners and business people with properties by the shorefront or low lying areas which are seen as in danger of inevitable damage after powerful storms such as Hurricane Fabian.

Yesterday, Freisenbruch Meyer confirmed that following an assessment conducted after Fabian it will also now refuse cover to homes in vulnerable areas. Argus said it will hike up premiums for homes in high risk areas and will force owners to pay a hefty initial chunk of the repair bill before the company will begin to pick up the tab.

Argus chief executive officer Gerald Simons said there was no decision yet on turning people down flat ? although he could not rule it out ? but the company recognised its community responsibility to provide cover for all. Chris Moroney, the chief financial officer at Freisenbruch Meyer, told The Royal Gazette yesterday: ?Over the past few months we?ve undertaken a review of our existing oceanside risks.

?Based on our assessment, coverage will either be declined or coverage will be offered with exclusions for hurricanes, tornadoes, storms, flooding and inundation of the sea.?

Other oceanside properties will be given normal renewals if the company?s assessor is happy there is an acceptable risk if, for example, a sea wall is in place.

BF&M said low lying homes on the South Shore, North Shore and Great Sound could find themselves turned down for insurance cover if the risk was deemed too high.

?Properties that are viewed as being prone to inevitable damage will, of necessity, be declined cover,? the company said in its annual report. The company will be following the recommendations of Smith Warner International, which carried out a report on coastal erosion for Government to assess damage caused by Fabian.

BF&M said the company will also have to look at properties beyond the South Shore which may lose cover if they are vulnerable to damage. Many properties along the South Shore, such as at Devonshire Bay, suffer regular sea surge damage after big storms.

Mr. Simons of Argus said last night: ?Covering homes in high risk areas is a challenge and we prefer not to decline people.

?We will do everything in our power to work with clients to mitigate risks so that we?re working with them to put up sea walls and extra defences against sea surge. We will see higher deductibles so that before we pay any amount out, an owner has to pay say $50,000 or $60,000, and we will charge higher premiums.

?It has become painfully obvious that some homes are more prone to damage than others, and the challenge is to be sure that we are fair to everyone when we are setting premiums.

?Those who make claims will pay higher premiums than those less likely to make claims, that is why people occupying homes in high risk areas will pay more.

?As a locally owned and operated insurance company, we recognise that we have a duty to offer insurance to the entire community so we recognise our duty to take the good with the bad.?

When asked if the company would turn down some people, he said: ?I don?t know. We don?t have a formal policy on that and we haven?t reached that stage yet.

?We will look at every case on its merit, but we are mindful of our community responsibility. It?s easy to say we could decline coverage, but if all the local companies did that, where would locals get their coverage? Where would locals be if Bermuda insurance companies didn?t recognise obvious facts of life such as hurricanes??

Colonial Insurance could not be contacted for comment yesterday.