WELLINGTON NORTH – Council here will take a chance on increasing deductibles in the township’s insurance policy in order to save close to $13,000 annually on its premium.
Facing a 19 per cent increase in the township’s 2021 insurance premium, council directed staff at the Jan. 11 meeting to investigate potential savings from increasing deductible limits prior to finalizing the contract for the coming year.
After conducting comparisons in the surrounding market and consulting with the town’s insurers, finance director Adam McNabb recommended the township accept deductible increases in both the general liability and property segments to $50,000 from $25,000.
“Historical claim levels are low, and typically claims in these segments are either significant enough to warrant a high value claim or are addressed internally if below the deductible limit,” McNabb states in the report.
“By increasing deductible levels to $50K, from $25K the township could save $12,700 in premium – effectively reducing the year-over-year premium increase from 19% down to 13%.”
McNabb added that in his view, “the gains for the township associated with the reduction in premium outweigh the risk associated with taking on additional deductible.
The report also recommended the township seek to market the municipal insurance portfolio for the 2022 renewal.
“Effectively what we would do is tender the insurance needs of the municipality for the 2022 calendar year with the hope of bringing a few more insurers to the table,” McNabb explained.
Council approved a motion to receive the report and implement the staff recommendations.