A high number of claims recorded in recent years led to a nearly 30-percent cost increase for the City of Carroll to maintain its property, liability, and workers’ compensation insurance. For Fiscal Year (FY) 2022, the combined cost of premiums totaled $311,552, but FY23’s figures jumped to $404,074, according to Laura Schaefer, the city’s finance director. She says a large volume of claims submitted statewide to the Iowa Communities Assurance Pool (ICAP) from the August 2020 derecho still affects ICAP’s members.
Another factor that contributed to the increase was a shift in the city’s total liability limit. At the beginning of FY21, the council increased that figure to $7 million from $5 million, leading to higher premium quotes from ICAP. The other key piece of the premium cost is workers’ compensation insurance through Iowa Municipalities Workers’ Compensation Association (IMWCA). Historically, Carroll has had a relatively low number of claims year over year, but Schaefer says the volume and severity were above the norm in recent years.
At-Large Councilman LaVern Dirkx asked about the potential for these premiums to return to previous levels. Schaefer indicated that it would be difficult for staff to predict.
The combined premiums are nearly $35,000 over the $370,000 initially allocated in the FY23 budget. The council unanimously approved a resolution accepting the quoted insurance premiums, but the topic will return to the agenda during a future meeting for officials to determine how the city will cover the shortfall. Video from the Monday, June 13 Carroll City Council meeting can be found included below.
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