As the state of Vermont recovers from the damage caused by Hurricane Irene in August 2011, the Vermont Leagues of Cities and Towns (VLCT) has been commended for its swift processing and payment of municipal insurance claims. However, many cities across the state are reporting that the tropical storm that ran up the East Coast two years ago also likely caused an increase in municipal insurance premiums in 2013.
According to the Vermont Digger, VLCT provides the vast majority of cities and towns in Vermont with municipal insurance and is owned by its members. While many similar insurers buckle under the number of claims that surface after a large storm, VLCT has paid out between $10 million and $14 million in claims over the past two years without suffering financial trouble. How? The insurance company has a $20 million self-insurance fund, the Property and Casualty Intermunicipal Fund, as well as reinsurance coverage.
As is common, the severe storm had an effect on the insurance industry in subsequent years. The VLCT maxed out its reinsurance in order to cover all the Hurricane Irene claims in 2011. In 2012, the reinsurance premiums surged by 50 percent, which VLCT paid for out of its reserve of net assets. In 2013, it was forced to pass some of the costs of rising rates onto its members. The result was an 8 percent rise in municipal insurance premiums, though it is difficult to say how much of that increase was related directly to Hurricane Irene. Increases in rates also take place if a town sees increasing property values or an increasing population.
Municipal insurance claims can be complex—and repairs are often needed immediately for damaged town and city structures. At the Voss Law Firm, we are committed to assisting municipalities with these insurance claims following an incident such as a hurricane or flood. To speak with a governmental insurance claim attorney today, call us to schedule an appointment: 888-614-7730.