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Climate-induced displacement has direct implications for non-economic loss and damage, including threats to health and wellbeing and loss of culture and agency. Displacement due to extreme events is particularly challenging for small island developing states (SIDS) given their high exposure and vulnerability to tropical cyclones. Devastating hurricanes in the Caribbean in 2017 exposed non-economic loss and damage associated with prolonged displacement of entire island populations due to complete destruction of communities. Such was the case in Ragged Island, The Bahamas, where the entire population was displaced. This study assesses national policies, plans, legislation and reports from The Bahamas to determine non-economic loss and damage experienced by displaced residents and how the policy landscape addresses these issues. We find that non-economic loss and damage was acknowledged neither by the policy landscape nor by Government actions, but that there were likely health impacts and disruptions to sense of place and connection to the island. Failure to consider non-economic loss and damage also contributed to assessments that costs of rebuilding outweighed benefits. While existing literature has acknowledged policy deficiencies on loss and damage at the national level in SIDS, this study illustrates real-world impacts of these deficiencies. The case of Ragged Island highlights the need for SIDS to take the lead in developing national responses to loss and damage as they are currently experiencing severe impacts, which are intensified by the lack of clear policies, plans or strategies. Key policy insights Climate-induced displacement is linked to non-economic loss and damage, particularly when displacement is prolonged and due to extreme events. However, these impacts are rarely addressed in national policies, plans or strategies. National policies that address climate-induced displacement and non-economic loss and damage are critical in order to reduce impacts experienced by displaced communities and expand feasibility assessments of rebuilding to include more than economic considerations. SIDS are currently experiencing non-economic loss and damage and should take the lead in developing national policies and strategies to assess, address and report on these impacts, particularly those SIDS that rely on international funders for recovery and response to extreme events.