Ottawa

Ottawa's insurance costs spike for 2nd straight year

Ottawa's long-time insurer walked away this year, and both the city and other municipalities are increasingly worried about how pricey it's becoming to get insurance.

Counties outside Ottawa also worry about rising costs of coverage and liability

An aerial view of the fatal Jan. 11, 2019, collision involving an OC Transpo bus at Ottawa's Westboro station. Ottawa's history of insurance claims after tragedies such as this has affected the premiums it now pays. (Guillaume Lafrenière/Radio-Canada)

If the City of Ottawa thought last year's 220 per cent jump in insurance premiums was bad, this year's renewal arguably went even more poorly.

The primary insurer that's covered Ottawa since amalgamation two decades ago, Frank Cowan Company, refused even to renew the package of policies. That forced the city to seek coverage with new insurers, at higher premiums, and to dip into reserves to cover the $5.4-million difference.

For 2020-2021, the city will pay $11.3 million to cover its fleets, facilities, and liability lawsuits, up from $5.9 million last year.

Frank Cowan Company wouldn't comment on the reasons for refusing to renew Ottawa's coverage.

The insurer has previously said, however, that various factors are at play: higher payments awarded by courts when people are severely injured, more class action lawsuits, higher insurance rates from property damage due to climate change, and an issue that's significant for municipalities: joint and several liability.

Ultimately it comes from the taxpayer. When you spend another $6 million just for insurance coverage, that $6 million that can't be used for other priority purposes in this city.- Coun. Riley Brockington

Exposure to that kind of liability — the risk a municipality might have to pay most of the compensation to a victim, even if it's only slightly to blame — was the main driver behind Ottawa's latest insurance hike.

For instance, Ottawa had to pay $2.3 million for its role in a fatal 2008 collision between an SUV and an OC Transpo bus that killed three Carleton University students, even though SUV driver, who was inebriated, was found to be 80 per cent responsible.

Councillors concerned

City solicitor David White said there's also the fact the city has had to settle lawsuits and pay insurance for two OC Transpo bus tragedies, at Westboro station in 2019 and near Barrhaven in 2013.

This year the city accepted a higher deductible, so that it would pay the first $5 million in exceptionally life-altering suits before insurance takes over, instead of $3 million.

But there are other claims, too. White told councillors last week the city might create the role of a risk management officer to reduce the number of slips on sidewalks and crashes involving municipal vehicles.

"It is concerning," said Stittsville Coun. Glen Gower. "[It's] not like we have an option to shop around to different insurance providers — it is what it is. We can't not have insurance."

River ward Coun. Riley Brockington agreed the insurance hike is "disturbing".

"Ultimately it comes from the taxpayer, and when you spend another $6 million just for insurance coverage, that $6 million that can't be used for other priority purposes in this city," he told CBC News.

Lanark sees big jump too

Southwest of the city, Lanark County is about to put out a tender to renew its insurance, and chief administrative officer Kurt Greaves has concerns.

There are only a few insurers, Greaves said, and not only could the price for coverage be higher, but it might cover less.

"It's just hard to get insurance right now. The worldwide market is a lot tighter," Greaves said.

Like many counties, Lanark's biggest liability is what happens on its roads. It paid about half a million dollars for this year's coverage, up 75 per cent from the year before — the biggest increase Greaves can remember.

The threat of being sued means the county must weigh its exposure to risk, he said, when it chooses to do something for residents like expanding the recreational trail system.

"There's potential for more mishaps, more lawsuits, and that would affect your [insurance] rates," he said.

Settlements like the ones paid out for a 2013 crash between an OC Transpo bus and a train partly explain why the cost of the City of Ottawa's insurance premiums have gone up. (Transportation Safety Board of Canada)

Municipalities lobby for reform

Greaves' counterpart in the United Counties of Stormont, Dundas and Glengarry, Tim Simpson, says they use GPS to document every pothole and road that's been salted to minimize risks.

Simpson said what he finds unfair are negligence cases where municipalities are only slightly at fault, but must pay because they have "deep pockets."

"Municipalities have targets on their backs, and I think the province really needs to take a really good, hard look at it and figure out what's fair," said Simpson.

For a decade, Ottawa, the counties and other municipalities have lobbied Ontario to change legislation and cap their payouts to reflect their portion of the blame. The Ford government did consult them in 2019.

The Ministry of the Attorney General said the biggest worry is liability from two types of cases: building inspections and personal injury cases. 

"We have received some useful data on these types of cases, and continue to explore ways to address these issues in a way that balances the concerns of municipalities with the needs of victims," wrote ministry spokesperson Brian Gray.

About the Author

Kate Porter

Reporter

Kate Porter covers municipal affairs for CBC Ottawa. Over the past 15 years, she has also produced in-depth reports for radio, web and TV, regularly presented the radio news, and covered the arts beat.

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