Risk insurance premiums out of control

For 2024, Lincoln County will be paying over $1,500,000 in risk insurance premiums. This represents a drastic increase of over 83% from just two years ago and 53% over 2023. And … these rates are expected to escalate next year as well, with no end in sight. Next to wages and benefits, risk insurance represents the second largest expense for the county.

One might wonder why such dramatic increases are happening. There are multiple factors at play, such as the state Legislature passing laws that de-criminalize property crime, joint and several liability that holds governments liable for wrongdoing by others, and, of course, increases in claims filed, which takes us back full circle.

When the state passes laws that fail to hold criminals liable for their acts, bad people commit more crimes, resulting in property losses, therefore an increase in insurance claims. Big insurance companies watch state legislatures closely and adjust premiums accordingly. In fact, there are insurance companies that don’t even want to do business in this state because they simply cannot mitigate the risks associated with the insane laws Washington state passes.

Joint and several liability plays a huge factor in risk insurance costs. Tort, or wrongdoing, claims against an individual, hold that if the state or local government has any degree of involvement, they bear the bulk of the costs of the damages award. For instance, in this real-life example in another county, if person one driving a car on a county road fails to stop at a stop sign and collides with a piece of farm machinery driven by person two and person two suffers debilitating injuries and sues person one, the county can be held liable for damages as well. The rationale being that the county could have installed a lighted, flashing stop sign or a stop light or more warning signs or… well, you get the idea.

It is always someone else’s fault. That mentality has gotten us where we are today. These are the people in power in our state who make these laws that do not hold people accountable for their actions. And you, the taxpayers, continue to pay more and more as a result. In the above example, the insurance pool that Lincoln County is in paid out over $7 million in damages. That represents far more than the entire premium paid into the pool for one year.

Sky-rocketing insurance premiums and out-of-control inflation, with no end in sight, paint a bleak future for small counties that have no additional revenue sources to offset these increasing costs. Lincoln County has historically done quite well in maintaining adequate reserves to get us through difficult times. That is unlikely to continue as we head into these unstable economic times.

Because of the detrimental effects of the 1% property tax limitation, it is possible that future voters will need to decide if they are OK with a decreasing level of service in all areas of county government or if they are willing to pay more property tax in the form of a levy lid lift. Whatever the case may be, Lincoln County will continue to provide the best service available within the constraints of the taxpayer dollars that we have to work with.