Nathan VanderKlippe
Northern News Services

Yellowknife (May 06/01) - Insurance rates for NWT municipalities will rise an average of 29 per cent this year.

That's on top of a 30 to 100 per cent increase last year. In 2001, the GNWT paid out $564,000 to help communities shoulder the burden.

This year, the Northwest Territories Association of Municipalities has already asked the Department of Municipal and Community Affairs for an additional $420,000 in funding.

Many communities said it will take some time to sort out the ramifications, and some were surprised by the rise.

"A lot of this stuff here is new to me right now," said Sachs Harbour Mayor Andy Carpenter. "We haven't really gotten around to doing any budgeting for it."

"No one ever fathomed the increases we are having," said Tuktoyaktuk Mayor Eddie Dillon.

Others, like Norman Wells Mayor Kevin Diebold, were happy the hike was so small. Norman Wells raised its taxes this year and budgeted for a doubling of insurance rates. The 29 per cent may grant the community a little more fiscal wriggle room.

But for those communities who did not anticipate the rise -- particularly non-tax base communities -- it may mean a cut in services if the GNWT doesn't step in.

Representatives from the association's 23 member communities joined with observers from nine other communities in the Great Hall of the legislative assembly to discuss the insurance issue and a number of other matters last weekend.

Among the presenters were a pair of underwriting specialists from The St. Paul, which insures the association.

Kathy Mak-symec warned that the entire insurance industry is raising rates and deductibles, while excluding an increasing number of items.

For example, neither terrorism nor building mould is still covered by insurers.

"The World Trade Center made everyone remember that severe losses happen," she said, explaining the reason for the increases.

Fortunately, the association managed to squeeze out of increases for terrorism. The association's insurance committee flew to Edmonton this January to argue that the North is not particularly prone to terrorist attacks.

After showing work already done by Northern municipalities in risk management, the association was granted a reprieve: insurance hikes for the rest of Canada ranged from 50 to 500 per cent.

Even so, municipalities were urged to do everything in their power to limit their annual claims. This year, the association bought into a liability plan with a $25,000 de-ductible, up from $5,000 in years previous. The savings in premiums will be put toward an collective pot, which will cover claims between $5,000 and $25,000.

Yellowknife Mayor Gord Van Tighem said he is confident MACA will provide the additional funds this year. But he warned that communities need to prepare for a day without territorial subsidies.

"That's only going to go on for so long," he said.