Cannelton settles with insurance company on flood pump

By KEVIN KOELLING

Managing Editor

CANNELTON – Cannelton Common Council members voted in a special meeting Jan. 28 to accept a settlement with an insurance carrier that initially refused to pay for repairs to a large pump damaged by flooding in 2011.

“We filed suit against them,” city attorney John Werner explained. “They have offered to settle this for the sum of $75,000. As you’ll recall, we had outside counsel assist us in this matter. Both they and I recommend to you that we settle with the insurance company for the $75,000.”

The settlement agreement notes the U.S. Specialty Insurance Co. issued a policy May 1, 2011 and the pump was damaged on or about May 3. The case was filed in the Perry Circuit Court but was moved to the Southern District Court in Evansville.

Outcomes of court actions are never predictable, Werner told the council, adding that Mayor Mary Snyder had secured funding from other sources to pay the balance of the bill “and we believe this is probably the most efficient way to dispose of this litigation.”

The cost was initially projected at approximately $180,000, the mayor said. On advice from the Army Corps of Engineers, the city opted to replace the pump instead of repairing it. A combination of funding included a $98,500 loan from the state Department of Natural Resources.

“We’ll be able to return some of that,” the mayor said. Other money toward the $116,380 replacement pump came from the state’s Office of Rural and Community Affairs and the Federal Emergency Management Agency. 

Snyder reported at another meeting Monday the pump had been shipped from California to Louisville, Ky., and had to undergo some conversions there before delivery to Cannelton.

“Going forward, will (the new pump) be covered by insurance? Councilwoman Lynn Fulkerson asked.

“We’re working on that. I can’t answer that,” Werner replied.

“It will be covered one way or another,” the mayor said. “It’s a requirement of FEMA.”

Clerk-Treasurer Arvina Bozarth said the city may have to find another company to insure the new pump.