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Consent
Item No. 4.
| MEETING DATE: 02/20/2024 |
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| TO: | HONORABLE MAYOR AND COUNCILMEMBERS |
| FROM: | JIM SADRO, CITY MANAGER By: Gabriella Yap, Assistant City Manager |
| 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. If approved, the term of the policy will be from March 1, 2024, through March 1, 2025, with a $5,000 deductible at an annual premium cost of $137,588.
DISCUSSION:
The City’s Property Insurance policy expiring on March 1, 2024, 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, one of the carriers declined to quote due to the age of the City-owned buildings, one carrier did not offer high enough coverage limits, 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 City's 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, one of the carriers declined to quote due to the age of the City-owned buildings, one carrier did not offer high enough coverage limits, 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 City's 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 | $124,081 | |
| Quote 1 | Travelers Property Casualty (RECOMMENDED) | $5,000 | $137,588 | |
| Quote 2 | Great American | $25,000 | $150,000 | |
| Quote 3 | RSUI | $25,000 | $250,000 | |
Travelers’ proposal (Quote 1) for all properties represents a premium increase of $13,507 from the City’s current annual premium of $124,081.
Staff recommends rejection of the quotes from Great American and RSUI (Quote 2 and 3) 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-owned properties. This will provide coverage for the City’s total insurable values of $71,835,697 (up from $70,375,098 last year due an increase in estimated reconstruction cost), and maintains the current $5,000 deductible at an annual premium of $137,588.
The City’s property insurance premium history for the last ten years is listed below:
Staff recommends rejection of the quotes from Great American and RSUI (Quote 2 and 3) 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-owned properties. This will provide coverage for the City’s total insurable values of $71,835,697 (up from $70,375,098 last year due an increase in estimated reconstruction cost), and maintains the current $5,000 deductible at an annual premium of $137,588.
The City’s property insurance premium history for the last ten years is listed below:
| 2014-2015 | $131,431 |
| 2015-2016 | $141,464 |
| 2016-2017 | $130,084 |
| 2017-2018 | $84,548 |
| 2018-2019 | $85,448 |
| 2019-2020 | $84,013 |
| 2020-2021 | $87,083 |
| 2021-2022 | $96,170 |
| 2022-2023 | $108,110 |
| 2023-2024 | $124,081 |
FISCAL IMPACT/SOURCE OF FUNDING:
The premium for property insurance coverage has been included in the adopted Fiscal Year 2023-2024 budget. Staff recommends acceptance of the pricing proposed by Travelers Property Casualty with a $5,000 deductible at an annual premium cost of $137,588 for the City’s property insurance policy coverage. This represents an increase of 10.89% or $13,507 from the current annual premium.
GENERAL PLAN RELEVANCE/CITY COUNCIL GOALS & OBJECTIVES:
Renewal of the City's property insurance policy is consistent with the following areas of the General Plan:
General Plan Goal LU 17.1 Adequate Community Supporting Uses
It is also consistent with the following FY 2023/2024 City Council Goals and Objectives:
Goal 2, Objective A: Management of Public Revenues and Fiscal Assets
General Plan Goal LU 17.1 Adequate Community Supporting Uses
It is also consistent with the following FY 2023/2024 City Council Goals and Objectives:
Goal 2, Objective A: Management of Public Revenues and Fiscal Assets