IOWA CITY – Iowa City could be headed to court over insurance coverage for its landfill after a fire last year caused $3.5 million in damage.
The city and its insurance company, Travelers Companies Inc. of Hartford, Conn., disagree on the insurance coverage related to the fire, City Manager Tom Markus wrote in an email released Thursday.
Last May, a fire broke out in a 7.5-acre section of the city’s landfill and burned for weeks. It's believed to have been sparked when someone dropped off waste that included something hot, igniting a cell liner made up of shredded tires.
Two insurance experts told The Gazette in June that the fire did not appear to be covered because the actual landfill is not mentioned in the city's property insurance policy.
Markus did not immediately return a message seeking comment, but Melissa Miller, Iowa City’s revenue and risk manager, said the city and Travelers are trying to resolve the question over insurance coverage, but the matter could end up in litigation.
Travelers initial decision in January was for $154,708, and the city has received that payment, Miller said. But the city believes all of the damage, currently estimated at $3.5 million, should be covered by insurance, she said.A copy of the city’s asset inventory included in Markus’ email does not list landfill cells. Miller said the city is going through the insurance renewal process now and exploring what coverage is possible for the cells.