City sees jump in third-party insurance claims
Amount paid out also much higher in 2017 than it was in previous years
The City of Calgary paid about $9.9 million in third-party insurance claims in 2017, a jump of more than $3 million over the previous year, according to administration’s insurance and claims services report that’s to go before council’s audit committee Tuesday.
The report highlights the city’s losses from automobile, liability and property claims from 2013 to 2017, excluding claims that resulted from the devastating 2013 flood.
While 2014 saw the most total claims reported of any of the past five years with nearly 9,700, last year’s 9,020 reported claims resulted in the most insurance dollars paid to third parties.
The $9,904,929 paid in 2017 was between $3.3 million and $4.7 million more than the third-party insurance claims paid out in a given year from 2013 to 2016.
The city also paid about $6.9 million last year in claims to city business units, for a total of nearly $16.8 million. The city paid out $14.9 million in total in 2016 and $13 million in 2013.
“You’re never comfortable with payouts, but without knowing the specific reasons in each of the claims and what the scenario was, sometimes it’s easier to settle a claim than it is to find valid yes or no sides,” said Coun. Shane Keating. “I think in many cases, you’re going to have insurance claims no matter what you do because either accidents do happen or claims happen, one or the other.”
With the population increasing by more than 11,000 and the total number of claims increasing by 817 from 2016 to 2017, the average number of claims per 1,000 citizens increased from 6.6 to 7.2.
But that’s down from 7.7 in 2013 and 8.1 in 2014.
Keating said the city would have to analyze each individual case to find out whether it’s possible to improve risk management and reduce the number of claims in the future.
“My understanding is any of the claims could go all the way from a slip and fall to a piece of machinery damaging some property,” he said. “It’s very wide.”
Risk Management and Claims, a department within the city’s Law and Legislative Services department, which drafted the report to be discussed later this week, is responsible for purchasing insurance for the city and handling all claims and losses.
To make a claim, citizens must complete a Notice of Claim form if they believe a loss has occurred as a result of the city’s negligence. The city says it will only provide compensation “if and when negligence against the city has been proven.” All claims are investigated and considered on their individual facts.
“There’s many, many different things claimed. Like, any time people are walking on the sidewalk and they fall down, they sue the city,” said Coun. Sean Chu.
“There’s always suing going on. With the economic downturn, naturally people are going to do that more.”
Chu said the city needs to do a better job of fighting back to protect against potentially fraudulent insurance claims, no matter how small.
“As a city ... we have to set an example,” he said.
Over the five years studied in the report, Calgary Transit dealt with the most claims of any city business unit or department, filed both for and against the city, with an average of 2,688 per year. Roads wasn’t far behind, with an average of nearly 2,400, followed by recreation with more than 1,000.
Fleet Services averaged just 27 claims per year.
The city purchased $6.9 million of insurance for 2018. As of Jan. 1, the total insured value of cityowned property was about $10 billion.