Tay municipal insurance likely to increase by almost 12%

Municipal insurance is an increasingly costly item to maintain.

At a recent regular meeting of Tay council, a municipal insurance renewal report was brought forward by CAO Andrea Fay. It proposed that the township enter into a renewal with BFL Canada for $509,000 excluding PST over the 2023 calendar year starting on December 31, 2022.

“Overall at this point,” said Fay, “we have an increase of 11.72 percent from last year for our insurance rates, and there is one portion of the insurance that is pending; once that is received we will follow up with a further report.”

The 2022 overall premium cost Tay Township nearly $456,000, which the 11.72 percent increase of $53,400 raised to $509,000.

Several factors were cited as the cause of the increase, including: Increased population; increased cost of claim settlements; increased minimum loss history from five to ten years; increased property values including cost to build and/or replace; and pressures from inflation.

Deputy Mayor Barry Norris asked Fay if there had been any change to the number of claims. Fay didn’t know offhand but stated that no new claims had been added over recent months. In response to Norris’ question for the deductible remaining at $25,000, Fay also said there had been no change.

Council approved the staff recommendation for the $509,000 renewal with BFL Canada, with the amount to be included in the upcoming draft operating budget which will be presented in 2023.

During an earlier Tay staff report concerning the 2023 budget, it was noted that: “the municipal budget can be influenced greatly by outside sources. Property and liability insurance costs have risen drastically in the last few years with 2023 seeing an estimated 15 per cent increase over 2022 rates.”

The rise of municipal insurance has raised concerns throughout many areas of the province, including across North Simcoe.

In 2021, Tiny Township CAO Robert Lamb told his council that joint and severed liability “is driving insurance rates higher and higher as municipalities are spending more and more time in court fighting frivolous claims against the municipality, and insurance companies are seeing us as more and more risks all the time.” He added that natural disasters, climate change, and change of liquidity were factors in rising municipal insurance costs.

The neighbouring town of Midland supported the Association of Municipalities Ontario (AMO), in 2022, for their recommendation of seven ways in balancing risks and liabilities to municipalities. Then-councillor Bill Gordon called joint and severed liability a “crippling reality”.

The 2022-2023 municipal insurance renewal staff report can be found in the council agenda on the Township of Tay website.

Tay council meets for regular council meetings every fourth Wednesday of the month. Further information including council’s agenda can be found on the Tay township website.

Derek Howard, Local Journalism Initiative Reporter, MidlandToday.ca