In an ironic twist, steps taken several years ago to try and save money on insurance will cost Mapleton Township over $120,000 next year – with the possibility of even more bills to come.
Late last month Mapleton received a “retro assessment” bill from the Rural Ontario Municipal Association (ROMA) Insurance Program for $120,843.
Mapleton was a member of the insurance consortium from 2002 to 2004. Finance Manager Mike Givens said some claims filed during that time are just making it to court now, hence the retro bill.
Givens explained municipalities joined the ROMA Insurance Program to save money, since it offered significantly lower annual premiums.
However, he added the program provided just “skeleton coverage,” and when a claim was filed, everyone involved has to help cover costs.
“It’s one of those things that sounded too good to be true and it basically was,” Givens said in an interview on Monday.
A letter to the township from the ROMA program indicates the latest bill is the result of “a single catastrophic claim” from 2004 “where the reserves exceed the ROMA [special underwriting group] retention of $1.8-million.”
Givens said the township has requested information about that claim but the ROMA group has yet to disclose the details.
And there could be more costs for the township in the future.
Currently there are still three claims outstanding for the 2004 year. Givens said the township has tried to get details on those claims as well, but has so far been unsuccessful.
At the council meeting on Oct. 7 Mayor John Green questioned the township’s participation in the ROMA Insurance Program altogether.
“There’s no place for a municipality our size in a reciprocal insurance program,” Green said.
He explained Mapleton is too small, considering some of the other municipalities that took part.
Councillor Bruce Whale said considering the township now pays about $120,000 per year for insurance, the retro assessment bill is not that bad if spread over the three years the municipality was part of the ROMA program.
Givens said the township in fact is expected to pay $141,483 this year for insurance coverage.
During the years the township participated in the ROMA program, annual bills were:
– $93,541 in 2002;
– $100,751 in 2003; and
– $123,324 in 2004.
But combined with the new retro-assessment bill, the township’s average annual costs under the ROMA program were over $146,000.
Other recent township insurance bills through an independent provider include:
– $106,968 in 2005;
– $131,314 in 2006; and
– $146,427 in 2007.
Council unanimously passed a resolution to set aside $120,843 in the 2009 budget.
