Municipal insurance is going up 17% – and apparently, that’s a good thing.
Insurance representatives Randy Ruetz, of Larry Grummett Insurance, and Steve Smith, of Frank Cowan Company, were quick to point out on Feb. 3 “the good thing” is the increase is less than some of its neighbours in Wellington, where increases have ranged from 5 to 40%.
In his report to council, Treasurer Gord Duff wrote “I am not happy about this increase, but considering the market conditions and the high level of service provided by Frank Cowan Company and its local brokers, I am recommending this insurance proposal be accepted.”
The coverage remains constant, although there are additions to coverage for the town’s wastewater facilities related to the recent change in sewage treatment plant operations. Property values are adjusted according to inflation and replacement costs and deductibles remain at $10,000.
The town’s overall the premium increased by over 17%.
“The insurance industry continues to struggle with a combination of higher claims, expanding liabilities and unsatisfactory performance from investments. These factors combine to put upward pressure on premiums,” Duff wrote.
“The bulk of the increased premium is caused by a 35% jump in the cost of municipal liability coverage. In fact, all other types of coverage are basically the same. With the increased coverage on property, the change in that portion of the premium is only 2%. All other premiums remained unchanged.”
The 17% increase works out to $30,437, plus tax. If this renewal is approved, this represents less than a 1% increase to the town’s tax levy.
“As you are aware, the Town of Minto, like any municipality is frequently engaged in issues which could result in litigation procedures, any or all of which could result in a substantial payout.”
Smith said that after four years of small or no increases, “unfortunately we’re in a situation where there is an increase.”
“What we’re finding is that the care costs in long-term injuries is substantial in terms of awards.”
He noted that Harmonized Sales Tax will have an effect as well.
“There are situations where services that are provided will be taxed.”
Smith said “the good News is that Minto has one of the lowest increases in the county.”
Even so, there are no major changes to insurance offered.
Mayor David Anderson said that one of the things his councillors would like to know where the increases are.
Smith said the majority of the increase in the liability policy which is up 35%”
Anderson agreed “our increase is one of the least in the county … it’s the good News with the bad News … if you want to call it that.”
He said each year the liability issues are every increasing.
“Our pockets are not as deep as everyone thinks they area.”
Councillor Rick Hembly asked if there was any benefit of adjusting the deductible claim.
Smith’s response was that it would not make a significant difference.
“It’s early in the year,” Anderson said. “We hope to have no claims.”
Council later approved the proposal from Frank Cowan Company Ltd. for municipal insurance coverage from March 1, 2010 to March 1, 2011 at a cost of $207,502 plus applicable taxes.
