Sewer backup may cause city insurance rates to double in Oskaloosa

by Dennis Sharkey

A major accident last summer that caused the city’s sewer system to back up into several homes and a business is causing the city to nearly reach the brink of uninsurable.

Jefferson County Insurance broker Pat Gottstein met with the Oskaloosa City Council last week and informed them that the city’s liability insurance premiums will nearly double over last year’s rates. Last year the city paid just under $10,000 in liability insurance premiums.

Gottstein said in anticipation that premiums will rise he attempted to get quotes from two other carriers but was shut down early. Gottstein said the two companies wouldn’t even entertain providing a quote.

“I don’t have any other avenues to go because you’ve been rejected,” he said. “Right now they don’t want any part of it.”

Last summer construction crews while working on a sewer manhole struck an 8-inch water line causing pressure to build. The pressure was enough to back the sewer system up.

Gottstein said the city’s current carrier will renew the city’s policy but with changes.

The company will not pay out more than $100,000 in claims on a sewer backup from here forward. In addition each claim filed will require a $2,500 deductible.

Gottstein said the incident will be on the city’s records for at least three years.

“You’re going to be in the high rate for awhile,” he said.

City wide sewer project engineer Brian Kingsley was present during the discussion and asked why the contractor, KC Construction, didn’t submit the claims to their insurance companies.

City Superintendent Bill Heard said in his opinion the contractor’s insurance company should have been used and not the city’s.

Gottstein also said that the insurance company may want to send a representative to the city to conduct a survey and audit of city practices and may make suggestions for changes.

In related news, Kingsley said KC Construction would not be submitting a pay request for the month of January because crews have not worked the entire month because of winter weather.

The substantial completion date for the sewer project is Feb. 25.

The council did approve a payment to B & G consultants for more than $13,500.

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Posted by on Feb 17 2011. Filed under Government, Municipalities, Oskaloosa. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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