Council insurance bill spikes by 27%

Gisborne District Council has recorded a 27% increase in insurance costs, as a result of extreme weather events.

Overall, the council is facing a $239,000 deficit for the financial year. This includes a $102,000 liability from a RiskPool mutual liability insurance scheme it was previously a part of, The Gisborne Herald reports.

Council chief financial officer Pauline Foreman reportedly said the council had been warned of potential premium increases. The council’s annual plan allowed for an increase and the council will try to mitigate that further by reducing operational costs.

While many of the natural disaster events that negatively affect insurance premium rates are outside of council control, steps could be taken to limit further premium costs, she told the council’s finance and audit committee.

The publication detailed the progress made in the council’s asset insurance schedules, including a planned review of the council’s 2015 insurance strategy. It is also reportedly considering dovetailing with the Bay of Plenty local authority shared services (BOPLASS) group, which tendered insurances collectively annually and has $500 million of infrastructure assets – twice the figure for Gisborne.

The council said the risk for Gisborne would be if Bay of Plenty had a lot of claims. “In terms of claims we are a small egg in a big basket,” committee chairman Brian Wilson noted.

Deputy Mayor Rehette Stoltz reportedly said the insurance situation would only get worse as time went on, while Councillor Shannon Dowsing was quoted as saying the increase was unfortunate but could not be avoided.