Yukon towns and villages, fed up with skyrocketing insurance costs, are getting ready to drop their regular insurance provider.

"We're paying a very high premium," said Whitehorse mayor Ernie Bourassa. "Insurance companies have made an awful lot of money over the past 20 years."

The Association of Yukon Communities believes it can save taxpayers millions of dollars by establishing its own insurance fund.

Records show that Association of Yukon Communities insurance claims over the past two decades has averaged $100,000 a year. Yet the association's insurance company Aon Reed Stenhouse is charging $1.1 million for continued coverage this year.

Twelve years ago, the city's insurance bill was $250,000 a year.

Bourassa, a former insurance salesman who held the account for the association, believes that the municipalities would be better off pooling that money, putting it in a special insurance account it can manage itself.

"This is really a no-brainer," said Bourassa. "This is something we can take advantage of to our benefit, and instead of paying an insurance company 30 to 40 per cent administration fees, we'll be paying ourselves, essentially."

Bourassa expects the association will drop its regular insurance coverage when policies expire at the end of this year.