The insurance industry’s response to higher claims, combined with other market factors including the new HST (physiotherapy treatments would be taxed), has resulted in increased insurance premiums for municipalities including Minto. The town is also assuming coverage of its water treatment plants, adding to the insurance cost.
The town’s insurance premium is increasing by more than 17 per cent, or $30,437 plus taxes, to $177,064 for 2010.
While the town staff and council are not pleased with the increased cost, they also acknowledge the reality of market conditions and are generally pleased with what treasurer Gord Duff described in a report as the “high level of service provided by Frank Cowan Company and its local brokers.” The insurance proposal described to council by Randy Ruetz and Steve Smith was approved with little discussion.
Smith and Ruetz explained that the amount awarded for long term injuries claims has drastically increased in recent years. Where judges once awarded amounts in the range of $5 million, they are now awarding $12 or $15 million.
Smith pointed out that although the “one per cent rule” will hopefully be changed by next year, at this point it still means that if a municipality is named in a claim, and is deemed even one per cent responsible, the municipality could end up paying the entire amount if the others named in the claim can’t pay. “Most people still carry only $1-$2 million on their auto,” said Smith. “But if the award is $12-15 million, you will pay.”
While the cost of most elements of the town’s insurance policy have remained the same as last year or slightly more, the cost of liability has gone up 35 per cent.
Duff pointed out in his report that the municipality is “frequently engaged in issues which could result in litigation procedures, any or all of which could result in a substantial payout.”
Ruetz and Smith did say that Minto’s insurance premium increase is one of the lowest in the county.
The two were asked about the possibility of increasing the deductible, but said it would not result in tangible savings.