When it comes to insurance, is it better to have a longer contract and pay less, or a shorter contract and to pay more?
The City of Williams Lake had that choice at tonight’s (Tuesday) City Council meeting.
Council had to choose between a bid by MIABC, quoted at $178,893, and one from HUB International quoted at $190,125.
The catch is that the city would have to be locked into MIABC for three years.
“Regardless of what next year’s insurance premium costs are going to be are unknown for both providers at this point in time because they’ll both do adjustments through their programs based upon whatever claim history or records they’ll deal with,” said Councillor Ivan Bonnell,
“I don’t have any difficulty going with a three year program at the rate MIABC’s proposing for this year, and whatever amendments they’ll bring forward next year because we’ll still have an $11,000 cushion to address it.”
Councillor Jason Ryll agreed.
“I still don’t understand why we would choose to take a gamble on a one-year contract for a higher price when the explanation that was given was that we might encounter higher insurance rates for next year,” said Ryll.
“We might, but we also might not if nothing happens in the next year for us to make an additional claim. I’m unsure as to why we would be choosing to go with a higher insurance rate provider, I’m sorry but the recommendation, to me, does not make prudent fiscal sense, which is why I’m not in favour of the recommendation.”
Not everyone was in agreement…
“Yes, the one year contract is higher, but you don’t know, we get locked into a three-year, and if the year two and year three are substantially higher than HUB, because these guys shop around for the rates that they’re getting, right?” said Councillor Craig Smith.
“We don’t know, we can’t see in the future, that’s my worry, locking us into a three-year, is that in the end, it could actually cost us way more.”
“I’m understanding that right now, everything is all up in the air,” said Councillor Marnie Brenner.
“We’ve had great increases on assessment values, everything just seems to be all up in the air, there’s unrest across the globe, and I think it impacts insurance rates. I do think we’re better off just to do a one year, and sign in for one year, and give things time to just settle down a little bit.”
“From my point of view, under normal circumstances, I would, as the policy suggests, that we go with the low bidder,” said Mayor Walt Cobb
“Because knowing what I do know, and some of the experiences I’ve had with insurance companies in the past, having to commit for three years. If they could commit the price for three years, maybe I could accept that, but they’re not doing that, and by the end of the term, because we have had one incident, that we don’t know what that’s going to end up like, because of that incident, we’ll be able to compare apples to apples, by going to the bidder we have now, or we know what the price is now, rather than wait till next year, and find out ‘we didn’t know you had a flood, we don’t know this, we don’t know that,” and once you’re tied in for three years they can put a dollar figure on that and that would be the end of the story.”
Councillor Sheila Boehm was not in attendance of the meeting, Councillor Scott Nelson did attend via zoom, but was dropped from the meeting before this resolution.
One point that was brought up was that the City does have an outstanding claim that has not been resolved.
Council voted in favour of choosing HUB International, the more expensive option, with a one-year term.