ATHABASCA — Local independent school bus contractors are being hit with massive increases in their insurance rates and are worried they will have to put their flashing lights on and their stop signs out for good if they don't get help.
Third generation contractor Yvonne Cumbleton with YC Charter, runs 13 buses in the Athabasca area and was hit with a 350 per cent increase per bus jumping from approximately $1,450 two years ago to $6,523 today.
“My insurance in two years has gone from $19,000 to $84,799 for the exact same 13 buses,” she said Nov. 3.
Cumbleton is not the only contractor facing the massive hit, Nick Kuzyk is a second-generation contractor with three buses running Aspen View Public Schools (AVPS) students to schools in Thorhild, and every contractor across the province insured through ARMIC (Alberta Risk Management Insurance Consortium).
“Three years ago, it was $1,300, last year it went to $4,500 and we just got a notification here yesterday for $6,523 plus $10,000 deductible per bus,” Kuzyk said Oct. 29.
If the school division owned the buses, as neighbouring Pembina Hills School Division (PHSD) does, the insurance increase would not have been as much, it is only the independent contractors that are feeling the pinch.
PHSD owns the buses and contracts the drivers whereas AVPS contracts its buses, and those companies provide the drivers and even for larger companies like Sparksman Transportation, who can self-insure and keep costs down, it is a major concern, said Sparksman president Mark Critch.
“I don't believe that in most of these areas big contractors are going to be able to absorb those routes,” said Critch Nov. 4. “Yvonne is a little different; she's got multiple buses on the road, but if you think about how many small contractors are in this area alone who have one bus, two buses, maximum three buses, they drive the bus themselves, their wife drives the bus. If they're pushed out of business, they don't drive bus anymore and then who's driving out in these rural communities? I can't find drivers out there ... and the big companies will never find drivers in these areas.”
Critch is also the president of the Alberta School Bus Contractors’ Assocation (ASBCA) and spoke with AVPS trustees, along with Cumbleton, in an emergency meeting Nov. 8, hoping to get some financial aid for her and other smaller contractors.
“There's a bunch of factors we as an association has never really gotten a straight answer for a long time on this and we've been working on this for months now,” he said. “In speaking with the IBC, the Insurance Bureau of Canada, a couple of weeks back, they said there was there was one year that there were a lot of claims, high claims, in school busing, but we didn't get information if that was just Alberta (or) what year these incidents would have occurred.”
Critch added the increase has nothing to do with the UCP government removing the insurance caps as that was specific to personal insurance, nor did it have anything to do with the Humboldt bus crash.
“At the end of the day the insurance carriers are private businesses,” said Critch. “They make their decisions based on what they feel is best for their business and they really don't seem to be very interested in the in the smaller one and two, up to 10 (bus) contractors.”
It's because as more people are sued after being in an accident, it increases insurance across the board, he said.
“Their stance on that, from what I understand, is things are changing, litigation is becoming more prevalent, and also the numbers that judges are awarding now for injuries is much higher,” said Critch. “So, they've started to push their limits up considerably to – they're saying – to offset these possibilities.”
For the smaller contractors like Cumbleton and Kuzyk, it could be the beginning of the end for their companies and will impact a handful of employees for Kuzyk and over a dozen for Cumbleton.
“There will be 13 people out of work ... if (AVPS) say they can’t help, but I don’t know what to do,” Cumbleton said. “We took it to (Premier) Jason Kenney, and he says ‘Well, you have insurance, you didn't say anything about the price.’ We didn't think we'd have to pay a fortune for insurance.”
And it’s not like monthly payments can be made – the entire cost, close to $85,000 for Cumbleton alone – must be paid up front and if there is no help, she must give 90 days' notice to withdraw service and wait a full year before she is reimbursed the remaining nine months, or $63,599. If she holds on for six months, then withdraws service, she gets no premiums refunded.
“I also insure one spare bus, so if one bus breaks down, I have another bus I can use, but I can’t afford to do that,” she said. “Now, if a bus breaks down and it takes a week to fix, you’re gonna be without a bus for a week. How can I justify $6,000 insurance on a bus that I might use 20 days a year?”
The new policy also restricts contractors from being hired by anyone else, something businesses large and small rely on to add extra income.
“I can't work for (Athabasca County), I usually do the summer swim program but because of the COVID we haven't done it for two years,” said Cumbleton. “And I used to do the (Athabasca Regional) Multiplex in the summertime. ARMIC won’t allow me to do that. So, they'll give you insurance, but then they get to choose who you work for.”
The rub is the buses could have been insured through RMA Insurance at a lower cost, but ARMIC is the company AVPS and several other school divisions chose.
Cumbleton and Kuzyk are hopeful AVPS will see their way to paying for at least half the increase because anything less than that and Cumbleton fears she will have to give the three-month's notice, she said.
“We're not in it because we make a ton of money, it's a good living for someone who's on a farm or a part time job,” she said. “They’re like all my kids, it’s a nice group to be around. You see them grow up and they move on and pretty soon you’re hauling (the next generation).”
