Insurer explains booming prices

·1 min read

ADELAIDE METCALFE - Representatives from the township’s insurance company, Frank Cowan, attended council’s regular meeting on Tuesday, 16 February 2021 to explain drastic increases in insurance premiums.

Tony Commisso, FCC Account Manager, outlined three main reasons why he believes rates are skyrocketing.

First, climbing costs of insurance claims, including labour, parts, and the costs of defending and settling claims.

Secondly, low interest rates - while this is a good thing for anybody borrowing money, Commisso explained that it has hindered returns on insurers investments.

Finally, a backlog in the courts has affected their ability to close liability claims. The longer a claim is open, the more it costs, he argued.

These three factors are contributing to a “hard market”, Commisso explained to councillors, meaning that insurers have completely lost their appetite for risk. He applauded the municipality on their open communication lines with Frank Cowan, but adds that consultation is recommended before making decisions that could affect the townships’ insurance policy.

As reported previously, Adelaide Metcalfe’s insurance premiums are up about 13.5% in 2021. Municipalities across the province are seeing similar increases, some up to 25% (for eaxmple, Bayham Twp.).

A number of resolutions from other municipalities have been circulated regarding municipal insurance rates. One, from the Municipality of Grey Highlands, calls on provincial changes to insurance requirements that “continue to ask property taxpayers to carry the lion’s share of a damage award when a municipality is found at minimum fault.”

Like policing and conservation, municipal insurance isn’t an expense with much wiggle-room for the small municipality. “We’re handed a bill, and we have to pay it,” said Mayor Kurtis Smith of these types of expenses.

McKinley Leonard-Scott, Local Journalism Initiative Reporter, The Middlesex Banner