Southgate’s insurance bill goes up by more than a third

·3 min read

Southgate Township will see a large increase in its insurance premium for the second year in a row.

Reps from Intact (formerly Frank Cowan) spoke to council about the increase to about $200,000 from about $147,500.

At the Oct. 1 renewal time last year, the cost rose by 25 percent.

More people are suing, and higher damage awards are being handed out, said Tony Commisso, regional manager. He said that judges are taking future care costs into consideration. Cases also cost more to defend, with more reliance on medical expert testimony.

Those claims are having their effect, he said. “It’s getting a little bit out of control.”

There are other factors, he said as it’s a hard market right now, with insurers very strict as to what policies they write and deduction.

These soft and hard markets are cyclical. Mr. Commisso said an unusually long soft market ended in 2019. Most often the hard markets, such as what we’re in, last three to four years of the decade, he said.

The general liability premium rose by 50 percent. The other high area was for the vehicle fleet which went up 70 percent. Part of that is a catch-up for understated premiums in the past.

Deb Wilson of the local NFP office said that the township’s fleet is getting newer, and so replacement values are increasing.

Mr. Commisso said that claims paid out were the main reason. Right now, the loss ration is at 105 percent, which means that for every dollar paid to the company, there is $1.05 paid out.

“We need that loss ratio to be in the 60 percent rate,” he said.

Ms Wilson said the claim of more than $300,000 for the waste truck replacement cost is having an impact on bills. As well, the township lost its claims-free auto status in 2019 which takes 10 years to gain back.

That said, she said the fleet rates were still good when compared to personal automobile premiums. Insurance on the garbage truck, for example last year was $1,265.

The staff report said that only two large providers offer municipal insurance – Intact Public Entities Inc. and Marsh, Canada Ltd. That’s due to the volatility in the level of claims. Together the two areas make up half the total bill.

Insurers are making less from the invested premiums, as well, he said, because of the market.

When asked for advice to keep rates lower, he said every agreement and contract should be reviewed from the standpoint of potential for an insurance claim.

Deputy-Mayor Brian Milne asked about progress on changing aspects of liability law in Ontario. If a municipality is even one percent liable, present legislation is such that it can end up paying a vast majority of the costs.

While the government had committed to act to change that, Mr. Commisso said that COVID had taken priority with legislative reform taking a back seat.

He said their company was still spending money on efforts to push for the changes.

Southgate Township has three open claims right now, Mr. Commisso said during the presentation.

M.T. Fernandes, Local Journalism Initiative Reporter, Dundalk Herald

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting