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Consent
Item No. 8.
| MEETING DATE: 02/21/2023 |
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| TO: | HONORABLE MAYOR AND COUNCILMEMBERS |
| FROM: | JIM SADRO, CITY MANAGER By: Elvie Balderrama, Human Resources Director |
| SUBJECT: | APPROVE THE CITY’S PROPERTY INSURANCE POLICY RENEWAL FOR A ONE-YEAR TERM
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RECOMMENDATION:
That the City Council authorize the City Manager to renew the City’s property insurance policy for all City owned properties with Travelers Property Casualty Company of America for all City-owned properties. If approved, the term of the policy will be from March 1, 2023, through March 1, 2024, with a $5,000 deductible at an annual premium cost of $124,081.
DISCUSSION:
The City’s Property Insurance policy expiring on March 1, 2023, provides coverage for City buildings and their contents against theft, damage, and fire.
In an effort to secure the lowest cost renewal option, staff instructed the City’s insurance broker, Schrimmer Insurance, to solicit bids for insurance coverage. Schrimmer Insurance approached seven insurance carriers for pricing proposals; however, two of the carriers declined to quote due to the age of the buildings, and two carriers were unable to compete and declined to quote.
Schrimmer Insurance was able to secure three pricing proposals, one of which is from the current carrier. A summary of the current coverage and comparable quotes for property insurance policies are listed below:
In an effort to secure the lowest cost renewal option, staff instructed the City’s insurance broker, Schrimmer Insurance, to solicit bids for insurance coverage. Schrimmer Insurance approached seven insurance carriers for pricing proposals; however, two of the carriers declined to quote due to the age of the buildings, and two carriers were unable to compete and declined to quote.
Schrimmer Insurance was able to secure three pricing proposals, one of which is from the current carrier. A summary of the current coverage and comparable quotes for property insurance policies are listed below:
| Company | Deductible | Premium | ||
| Current Carrier | Travelers Property Casualty | $5,000 | $108,110 | |
| Quote 1 | Travelers Property Casualty (RECOMMENDED) | $5,000 | $124,081 | |
| Quote 2 | RSUI | $25,000 | $185,960 | |
| Quote 3 | Crum & Forster | $25,000 | $136,397 | |
Travelers’ proposal (Quote 1) for all properties represents a premium increase of $15,971 from the City’s current annual premium of $108,110.
Staff rejected (Quote 2 and 3) RSUI and Crum & Forster due to significantly higher premiums than the Travelers’ proposal and higher deductibles.
Staff recommends renewing the City’s property insurance policy with Travelers Property Casualty Company of America for all City properties. This will provide coverage for the City’s total insurable values of $70,375,098 (up from $62,892,403 last year due inflationary impacts on construction costs, and adding newly acquired properties), and maintains the current $5,000 deductible at an annual premium of $124,081.
Staff rejected (Quote 2 and 3) RSUI and Crum & Forster due to significantly higher premiums than the Travelers’ proposal and higher deductibles.
Staff recommends renewing the City’s property insurance policy with Travelers Property Casualty Company of America for all City properties. This will provide coverage for the City’s total insurable values of $70,375,098 (up from $62,892,403 last year due inflationary impacts on construction costs, and adding newly acquired properties), and maintains the current $5,000 deductible at an annual premium of $124,081.
FISCAL IMPACT/SOURCE OF FUNDING:
The premium for property insurance coverage has been included in the adopted Fiscal Year 2022-2023 budget. Staff recommends acceptance of the pricing proposed by Travelers Property Casualty with a $5,000 deductible at an annual premium cost of $124,081 for the City’s property insurance policy coverage. This represents an increase of 14.7% or $15,971 from the current annual premium.
GENERAL PLAN RELEVANCE/CITY COUNCIL GOALS & OBJECTIVES:
General Plan Goal LU 17.1 Adequate Community Supporting Uses.
This recommended action achieves the following element of the City of La Habra's FY2022-23 Goals and Objectives:
Goal 2, Objective A - Management of Public Revenues and Fiscal Assets
This recommended action achieves the following element of the City of La Habra's FY2022-23 Goals and Objectives:
Goal 2, Objective A - Management of Public Revenues and Fiscal Assets