Vernon Matters file photo

By Liam Verster

City-Owned Building Appraisal

City of Vernon exploring property insurance options

Jul 12, 2024 | 1:00 PM

Vernon city staff are investigating options for property insurance coverage.

A report to Vernon City Council stated staff were looking to find a policy that provides adequate coverage at a low premium.

“Over the past two years, premiums have increased at a rate higher than inflation even when excluding the building enhancements/additions that were completed during that period,” the report from Terry Martens, Manager of Financial Planning and Reporting, stated.

“The total premium for 2024 was approximately $631,000. lnsured values for City-owned buildings have been adjusted each year by an across the-board inflationary factor. There is concern that these values are becoming increasingly inaccurate, thus causing higher risk of insufficient coverage.”

The report noted that an appraisal of City-owned buildings could be done at a cost of $66,000, but doing so could provide more accurate values and may cause a higher increase in premiums than previously experienced.

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However, the city’s budget does not include funding specific for an insurance appraisal, and the report asked council to agree to provide that $66,000 from the Civic Buildings Reserve, which as of June 12, had an available balance of $326,654.

Another option for council to consider is to have a self-insurance mechanism where the city would contribute an amount in lieu of the premium into a reserve account each year. However, it warns that if a catastrophic event occurs and destroys multiple facilities then that reserve balance would likely be insufficient in covering the rebuilding costs.

Council will be presented the report at the regular meeting Monday, July 15, and it’s recommended it be accepted for information and that funds be made available to undertake a property insurance appraisal of City-owned buildings.