Things are looking rough for Ottawa, as the city’s insurance costs have increased for the second consecutive year.
For the 2020-2021 period, the city will pay $11.3 million to cover its fleets, facilities, and liability lawsuits. By comparison, the city paid $5.9 million for insurance in 2019, which already represented a 220% jump in insurance premiums, CBC News reported.
Ottawa also accepted a higher deductible for the 2020-2021 period, which means that it will have to pay the first $5 million in lawsuit claims before its insurance triggers. This is an increase from the previous deductible of $3 million.
Last year, Ottawa had to seek insurance coverage from a new insurer after its insurer of two decades – Frank Cowan Company – refused to renew the package of policies.
Frank Cowan Company would not comment on why it refused to renew the city’s coverage last year. But the insurer had previously explained that various factors were involved, such as the higher payments awarded by courts when people are severely injured, more class action lawsuits against the city, higher insurance rates from climate change-related property damage, as well as joint and several liability (wherein the city and another party can each be independently held liable for the full amount of a personal injury claim).
CBC News said that exposure to joint and several liability was the main driver of Ottawa’s recent insurance premium hike. The news portal cited an instance wherein the city had to pay $2.3 million for its role in a fatal 2008 collision between an SUV and an OC Transpo bus that led to the deaths of three students – the city had to pay full price for the award even though it was found that the SUV driver involved, who was inebriated at the time, was 80% liable for the accident.
