Editorial: Best to prepare for the worst

The Italians have an expression that makes the case for a Plan B or fallback position. “Non succede ma se succede…” reminds us that, even when all appears fine, things can still go awry.

That is where insurance comes in. Still, for many, not to say most, buying insurance is an expense they argue they can do without rather than an investment that can pay dividends and save the day.

It has now emerged that although the devastating Salina fireworks factory explosion caused €1.4 million in insured damage, many impacted properties were, in fact, uninsured.

Almost 300 insurance claims were made in the month after the June 1 blast.

More than half of them involved home insurance policies, just over a sixth were linked to damage to property and 37 consisted of commercial policies. There were also 12 motor claims, three covering yachts and one agriculture.

The Malta Insurance Association expected more claims to be made. That this was not the case, its director general, Adrian Galea says, was because of the disinterested attitude in insuring property and possessions.

“Unfortunately, many people decide to take a chance and go without insurance,” he remarked.

Sadly, for the individuals or businesses affected, it is a decision that is usually far more expensive than the premium one pays for a policy.

Along the years, interest in insurance grew, with more people willing to consider it, though not necessarily deciding to pay the premium.

Motor vehicles must be insured by law. Banks demand house and life insurance when giving a loan to buy property.

These and other developments, not to mention instances of nature striking and leaving a trail of destruction, such as Storm Harry at the beginning of this year, contributed to highlighting why insurance should be given more weight.

While the number of those buying insurance covering life, property, travel, possessions and medical treatment seems to be growing, too many people remain totally exposed.

A study by the Malta Financial Services Authority in 2021 had found that almost one in four respondents never bought home insurance. The figures relating to the uninsured properties and businesses hit by the June fireworks explosion indicate the situation is not much better.

Buying insurance can be costly, more so if more than one type of insurance is purchased, and the amount has to be paid annually.

However, what probably makes most people opt against is not mainly the money but the feeling, or, rather, the hope, they will not be using it in any case because nothing will happen to them or their assets, movable or immovable.

The intervention, by way of financial assistance or material support, by the government in ‘the hour of need’ could be another reason why people may conclude any losses incurred will be compensated for.

We have become more aware of the risks modern everyday life throws at us, yet, the number of those actually being insured has not risen in parallel.

Globally, it is estimated that only about a third of economic losses from natural catastrophes are insured.

That is restricted to the disastrous effects of climate change and excluding other ‘vulnerabilities’ like inadequate pensions, long waiting lists for medical treatment and rising healthcare costs, cybercrime and growing economic uncertainty.

We ought to stop underestimating risks we will probably never experience but that will impact us badly if we do. Many, most, continue to hope for the best but few prepare for the worst. This must change.