Ottawa's insurance costs spike for 2nd straight year

If the City of Ottawa thought last year's 220 per cent jump in insurance premiums was bad, this year's renewal arguablywent even more poorly.

The primaryinsurer that's covered Ottawa since amalgamation two decades ago, Frank CowanCompany, refused even to renew the package of policies. That forced the cityto seek coverage with new insurers,athigher premiums, and to dip into reserves to cover the $5.4-million difference.

For 2020-2021, the city will pay $11.3 million tocover itsfleets, facilities, andliability lawsuits,up from $5.9 million last year.

• City's insurance costs soar after fatal bus crash

Frank Cowan Company wouldn't comment on the reasons for refusing to renew Ottawa's coverage.

The insurerhas previously said, however, that various factorsare at play:higher payments awarded by courts when people are severely injured, more class action lawsuits, higher insurance ratesfrom property damage due to climate change, and an issue that's significant for municipalities: joint and several liability.

Ultimately it comes from the taxpayer. When you spend another $6 million just for insurance coverage, that$6 million that can't be used for other priority purposes in this city.- Coun. Riley Brockington

Exposure to that kind of liability the risk a municipality might have topay most of the compensation toa victim, even if it's only slightlyto blame was the main driver behind Ottawa's latest insurance hike.

For instance, Ottawa had to pay $2.3 millionfor its role in a fatal 2008 collision between an SUV and an OC Transpo bus that killed three Carleton University students, even though SUV driver, who was inebriated, was found to be 80 per cent responsible.

Councillors concerned

City solicitor David White said there's also the fact the city has hadto settle lawsuits and pay insurance fortwo OC Transpo bus tragedies, at Westborostation in 2019 and near Barrhaven in 2013.

This year the cityaccepted a higher deductible, so that it would pay the first $5 million in exceptionally life-altering suits before insurance takes over, instead of$3 million.

But there are other claims, too.White told councillors last week the city might create the role of a risk management officer to reduce the number of slips on sidewalks and crashes involving municipal vehicles.

"It is concerning," said StittsvilleCoun. Glen Gower."[It's] not like we have an option to shop aroundto different insurance providers it is what it is. We can't not have insurance."

River ward Coun. Riley Brockington agreed the insurance hikeis"disturbing".

"Ultimately it comes from the taxpayer, and when you spend another $6 million just for insurance coverage, that$6 million that can't be used for other priority purposes in this city," he told CBC News.

Lanarksees big jump too

Southwest of the city, Lanark County is about to put out a tender to renew its insurance, and chief administrative officer Kurt Greaveshas concerns.

There are only a few insurers, Greaves said, and not only could the price for coverage be higher, but it might cover less.

"It's justhard to get insurance right now. The worldwide market is a lot tighter," Greaves said.

Like many counties, Lanark's biggest liability is what happens on its roads. It paid about half a million dollars for this year's coverage, up 75 per cent from the year before the biggest increaseGreaves can remember.

The threat of being sued means the county must weigh its exposure torisk, he said, when it chooses to do something for residentslikeexpanding the recreational trail system.

"There's potential for more mishaps, more lawsuits, and that would affect your [insurance] rates," he said.

Municipalities lobby for reform

Greaves' counterpart inthe United Counties of Stormont, Dundasand Glengarry, Tim Simpson, says they use GPS to document every pothole and road that's been saltedto minimize risks.

Simpson said what hefinds unfair arenegligence cases wheremunicipalitiesare only slightlyat fault, but must pay because they have "deep pockets."

"Municipalities have targets on their backs, and I think the province really needs to take a really good, hard look at it and figure out what's fair," said Simpson.

For a decade, Ottawa, the counties and other municipalitieshave lobbied Ontarioto change legislation and cap their payouts to reflect their portion of the blame. The Ford government did consult them in 2019.

• Ford to look at liability rules that municipalities say leave them vulnerable

The Ministry of the Attorney General said the biggest worry isliability from two types of cases: building inspectionsand personal injury cases.

"We have received some useful data on these types of cases, and continue to explore ways to address these issues in a way that balances the concerns of municipalities with the needs of victims," wrote ministry spokespersonBrian Gray.