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Committee hears rising insurance costs; workers' comp mod rating improving but premiums still up
Summary
Staff reported an improving workers' compensation modification rate (from 1.7 to 1.48) but said insurance premiums and property/casualty costs have risen; the committee discussed deductibles, replacement‑cost coverage and whether to shop markets or self‑insure higher deductibles.
Finance staff told the committee the town’s workers’ compensation modification (mod) rating has fallen from 1.7 in 2024 to 1.48 for the next renewal, reflecting recent improvements in claims experience. "Our our mod rating actually went down this year...for '25, it went down to 1.48," the manager said.
Staff also walked members through larger insurance trends: commercial property and general liability premiums in the town’s package showed substantial increases over recent years, driven in part by higher replacement costs for vehicles and major equipment. Committee members discussed options such as higher deductibles, pooling money into a self‑insurance reserve, or structuring different deductibles by asset class (for example, lower deductibles on ladder trucks and ambulances but higher deductibles on pickup trucks).
Members asked whether higher deductibles would produce meaningful savings. Staff agreed to discuss tradeoffs with the town’s broker and to explore scenarios showing the premium savings associated with higher deductibles or a structured reserve. The committee also discussed that replacement‑cost coverage increases the insured value of assets (and therefore premiums) but protects the town from depreciation gaps on large apparatus such as ladder trucks and ambulances.
No vote was taken. Staff said they will raise deductible scenarios with the broker and report back.
