TIMMINS -- The Township of Black River-Matheson is the latest municipality to raise concerns with the rising costs of insurance premiums.

Its town manager, Chris Wray, sent a letter to fellow local governments and the Ministry of Municipal Affairs and Housing, saying its renewed insurance jumped from around $100,000 to over $200,000.

"A doubling of a premium over one year — in my 25 year (career), I've never seen that happen," said Wray.

For a town with a budget of less than $10 million, Wray said it's a baffling price gouge that the township will inevitably have to make up for in taxes.

 

'We're seen as having the deepest pockets'

According to insurance company reports, municipal insurance premiums increase due to the environmental impacts of climate change, cyber crime and the rising costs of liability claims.

But the main culprit, according to Federation of Northern Ontario Municipalities president, Danny Whalen, is a law that requires local governments to cover the largest cost in a liability claim — even if it was only partially or minimally responsible.

It's referred to as 'joint and several' liability and is an issue municipalities and insurance companies have been contesting for at least a decade.

"The court system might find that the municipality was one or two percent responsible for the outcome but because we're seen as having the deepest pockets, we're expected to pay the largest portion," Whalen said.

"In lots of cases the easiest way out is to send the bill to the municipality and that's simply not fair to the taxpayers."

 

A 10-year call for action

Whalen said he's been meeting with the provincial government and the Association of Municipalities Ontario to try and make headway on this issue.

He said he's also been reaching out to local governments in the northeast for feedback on their situations.

"We've received responses so far this morning of anywhere from eight per cent to 70 per cent (increases), so it's significant," Whalen said.

Insurance companies we contacted either could not respond by our deadline or declined an interview.

The Ministry of the Attorney General issued a statement, saying it has been consulting with municipal associations and their members to find possible solutions.

"Municipalities have shared with our government concerns about increasing insurance costs and the impact they can have on property taxes and municipal taxpayers," the statement read.

"We have received some useful data and continue to explore ways to address these issues in a way that balances the concerns of municipalities with the needs of victims."

 

'The last thing that I thought we'd have to deal with'

The ministry noted that this will be an ongoing conversation and that the province needs to be sure that any action taken will actually lead to lower insurance rates.

Meanwhile, Wray said Black River-Matheson is in a tight spot, as will other municipalities who haven't yet renewed their insurance policies.

"We're dealing with COVID, we've got infrastructure issues, we've got asset management issues," said Wray.

"We don't need to deal with insurance and that's the last thing that I thought we'd have to deal with this year."