Rural school boards facing steep insurance rate hikes

Chinook’s Edge and Wolf Creek School Divisions saw insurance jump by $1 million

Chinook’s Edge School Division was already looking at a $1.7-million budget shortfall, and then it was blindsided by a $1-million insurance rate hike.

Wolf Creek School Division got the same bad news — its insurance will spike to $1.6 million from $578,000.

With the increase, the insurance bill for Chinook’s Edge is now $1.3 million, which comes on top of other financial challenges, including government cutbacks and rising costs, said superintendent Kurt Sacher.

“Essentially, we’re operating with $1.7 million less. And then throw in the curve ball of insurance, and we now have $2.7 million less as a school division,” Sacher said Tuesday.

“So, we’re advocating strongly with the government, with (Education Minister Adriana LaGrange) to see if there is some way the government can step up with a long-term strategy for insurance, because it’s going to continue to be a major problem for our jurisdiction.

“If we have to continue to pay an additional $1 million for insurance, it’s just incredibly hard to understand and fathom that we would be responsible for that.”

Chinook’s Edge is operated out of Innisfail, while Wolf Creek is centred in Ponoka.

Wolf Creek superintendent Jayson Lovell said there was speculation that some changes could be coming through the Alberta School Board Insurance Exchange, a partnership of insurance companies that backs nearly 50 school boards as well as another 300 school-related associations.

However, the size of the price hike was unexpected and added to a deficit that hit $3 million in Wolf Creek.

Lovell said insurance exchange representatives told school boards that expensive payouts connected with wildfires near High Level and Wabasca, as well as damages to schools from last February’s cold snap, and even a pair of school fires in Ontario, that caused $100 million in damage, put a lot of pressure on insurers.

Four major insurers pulled out of the exchange, which had to go to the open market to find replacements, which also increased costs.

“Clearly, we’re in a very different climate with insurance,” said Lowell.

“We have limited funds we can draw from. In our school division, our board was fortunate enough to have enough reserves to cover this unanticipated cost, but that is not a long-term solution.

“Absolutely, we want to find other solutions that will stabilize this and also get us back to predictable (rates).”

Lovell said rates could come down if it turns out the expensive claim situation was more an anomaly than an omen.

“If that’s not the case, and this is the new reality, then we need to work closely with government. We need to work closely with (the exchange) and we need to try to do our best to ensure we have adequate coverage but, at the same time, make it cost-effective for school divisions.

“It’s a big-ticket item.”

The exchange does not provide insurance to either Red Deer Public Schools or Red Deer Catholic Regional Schools.

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