Aylmer scrambles to avoid insurance hike

·3 min read

In light of a looming substantial insurance increase, Aylmer is scrambling to examine any possible alternatives before the May 1 renewal date for the municipal policy.

Insurance cost the town $204,303 between May 1, 2020 and April 30, a 20.82% increase from the year before due to joint and several liability. All Ontario municipalities experienced similar increases last year.

The town’s insurer, Frank Cowan Company Limited, brokered through through Hamilton Ward and Cathers Insurance Service Limited of Aylmer (HWC), has indicated a larger increase will be required in this year’s renewal, according to a report by Chief Administrative Officer Andy Grozelle.

“Essentially what we’re looking at is probably best case scenario a 40% increase over two years, and worst case almost 60% over two years,” said Mr. Grozelle. “These are big dollars, so it’s going to have an impact on next year’s budget if we don’t do everything we can right now.”

The town is not in a favourable position to take on a second large increase, he wrote, mainly due to past claims history. Staff are now undertaking a modified quotation process for insurance services to give council more options to review.

Council also approved a bylaw to delegate authority to the Chief Administrative Officer (currently Mr. Grozelle) to address “low dollar value” items (under $10,000) without making an insurance claim.

“The analogy I always use is if you get in a tiny fender bender, sometimes you just exchange information and then get a quote and you don’t call up your insurer,” said Mr. Grozelle. “That’s what we’re hoping to do here with the town, to get the very small ones out of there.”

Staff also plan to increase deductible amounts substantially, with those values remaining confidential from the public.

“One thing I never make public is the town’s deductible, because what you will have is people will make a claim for just $1 underneath it, knowing that our insurance’s lawyer will settle for that amount,” said Mr. Grozelle.

Deputy Mayor Sheri Andrews noted out the town’s history with HWC as a broker for the town’s municipal insurance, and added they are large supporters of the community.

“If it doesn’t cost any more to go direct than through our brokerage, then I recommend that we stick with our brokerage, completely understanding that we need to find the best rates for the community because it is tax dollars and it is a large amount,” she said.

Councillor Arthur Oslach, who sits on the Catfish Creek Conservation Authority (CCCA) board, commented that CCCA uses the same broker. CCCA’s insurance cost $50,014 this year, a 22% increase ($8,718) over 2020.

Cr. Oslach said CCCA investigated other possibilities for insurance providers. “We basically came up with Cowan as the best insurance provider, the cheapest, even though there’s a large increase last year, and experienced a major increase this year.”

Mr. Grozelle said that this year, the substantial increase was due to the town’s past claims history. “So this isn’t something that every municipality is essentially facing.

“But I do agree – I’ve worked with Frank Cowan at every municipality that I’ve worked with, and they always do great work.”

Veronica Reiner, Local Journalism Initiative Reporter, Aylmer Express