During its meeting earlier this week, the Carroll City Council voted to renew the city’s property and liability insurance policy despite a 32-percent increase in annual premiums. The policy, which includes liability and property insurance from the Iowa Community Assurance Pool (ICAP) and worker’s compensation from the Iowa Municipal Workers Compensation Association, has remained relatively stable for the city in recent years. However, City Manager Aaron Kooiker says multiple high-claim terms, rising property values and increased construction costs are hitting the budget all at once.
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The city’s current insurance policy carries a $7 million deductible. Mid-Iowa Insurance & Real Estate serves as the city’s local agent, and the company’s co-owner, Terry Axman, was at Monday’s meeting to explain some of the reasoning for the sharp increase. He says a major contributing factor is an $11 million jump in the city’s total coverage amount.
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The property insurance portion of the premium is increasing from $206,000 to $329,000, a 37-percent jump. Axman says a large number of claims from the city and other ICAP members also contributed to the jump.
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As a result, many insurance companies have cut back or withdrawn their operations in Iowa. For example, the city sought bids from a private insurer, EMC Insurance Group, Inc., but they declined to even offer coverage. Axman says it is critical to remember also that ICAP is not a for-profit insurer.
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Axman adds that it is possible the city could see premiums return to more normal levels over the next several years, but that will depend on the city’s claims and overall claims seen statewide. The council unanimously approved the Fiscal Year (FY) 2025 insurance policy.