Collingwood council is all in on joining the new county-wide insurance pool.
During their committee of the whole meeting on Jan. 27, Collingwood council voted unanimously in favour of joining in on the Simcoe (County) Municipalities Insurance Pool once it launches later this year, organized through the County of Simcoe.
The county-based program will afford the county’s member municipalities (towns and townships) reduced rates and greater control over their insurance spend. Founding municipalities are required to sign on by Feb. 14 to be included when the program launches on June 1.
Clerk Sara Almas has overseen the town’s insurance for the past 15 years.
“It was one of the most frightening things. Insurance is very complex. You can be overinsured, or under insured. I was very skeptical about the beginning of this,” Almas told councillors during Monday’s meeting.
Almas explained that even if the town signs onto the pool as a founding member, the town will still require some coverage for items not included.
An insurance pool has its members contribute to a pool fund, which helps cover some of the claims costs and reduces insurance premiums, and spreads out the risk across more municipalities. It also leverages the buying power of a group of municipalities versus a single municipality to get better insurance rates.
According to the Collingwood staff report, Collingwood has seen consistent growth in the cost of insurance premiums over the years. In 2018, the town paid $602,332, and that number has crept up with the town shelling out $1,030,907 for insurance in 2024. And those costs don't include cyber or water insurance, which will also not be covered by the pool.
Insurance premiums are expected to cost Collingwood $1,072,449 in 2025.
If Collingwood signs on to the pool, town staff are estimating the town’s projected savings and accumulated equity in the pool would amount to $1,966,159 over five years.
The current projected cost for the town to join the pool for June 1 will be $907,287, plus the continued cost of certain insurances not covered by the pool of $74,570. The town’s insurance is renewed annually following the calendar year, however there is no early termination penalty if the town chooses to leave mid-year.
Under the pool program, coverage will be under a single policy, with each municipality having access to the highest limits under each coverage. The county would hire between six and eight individuals to administer the program and the costs and benefits would be managed in-house.
Municipalities that don’t join the consortium at the outset will have to wait five years for their next opportunity to join, which isn’t guaranteed. Founding members will determine who will be allowed to join in the future and they’re not obligated to accept new members.
The individual municipality is responsible for paying the deductible — $10,000 to $100,000 — depending on the category, such as liability, property or auto.
The pool pays the next $490,000 to $400,000, to a ceiling of $500,000, dependent on the deductible amount. The insurer pays everything over $500,000.
Once the Simcoe County pool is live, it will join other regions that have also jumped into their own regional pools including Waterloo Region (established in 1998) and Durham (in 2000).
During council discussion, Almas noted that questions have been forwarded to town staff from residents about the pool, one asking what will happen if other municipalities have higher claim rates, and how that might impact Collingwood.
“I think it will be critical that we bring in really robust risk management and analysis of the centralized claims data to be able to detect those kinds of trends very early,” explained Axxima consultant Ryan Durrell, who was hired by the county to compile the county study and oversee implementation of the pool. “We have to wait for trends to emerge, but that doesn’t mean we can’t act fairly quickly.”
Coun. Deb Doherty took the thought further, and asked how the pool will deal with municipalities within the pool who may make riskier decisions to ensure other municipalities aren’t faced with the bill for their neighbour’s choices.
Durrell provided an extreme example of what could happen under the pool in those situations.
“If you build a completely concrete indoor skateboard park with no supervision...you’re probably going to be met with the expectation that your levy should go up until proven otherwise,” said Durrell. “But, all things being equal, things should be quite stable.”
Durrell also noted that in the work completed to date on the pool, the county has found that most member municipalities are stable and there aren’t any obvious risky outliers that jump out so far. The town’s procurement manager Michael Trueman said that Collingwood is very middle-of-the-pack when it comes to risk.
“Our premiums for insurance have gone through the roof,” said Mayor Yvonne Hamlin. “I think this will lighten the load on our staff and give us extra cash for much-needed wants and needs in our community.”
Any decisions made during a committee of the whole meeting need to be ratified during the next regular meeting of council before going into effect.
-- With files from Wayne Doyle