Item No. 5.
| MEETING DATE: 02/16/2021 |
|
| 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 |
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 the period of March 1, 2021, through March 1, 2022, with a $5,000 deductible at an annual premium cost of $96,170.
DISCUSSION:
The City’s current Property Insurance policy expires on March 1, 2021. This policy provides coverage for all City owned 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 some of the buildings.
Schrimmer Insurance was able to secure five 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:
Travelers’ proposal (Quote 1) for all properties represents a premium increase of $6,375 from the City’s current annual premium of $89,795.
Staff rejected Quotes 2 and 5 from Everest, Great American, RSUI, and Markel respectively, 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 $60,017,503 (up from $57,962,996 last year due to an increase in construction cost in the State of California), and maintains the current $5,000 deductible at an annual premium of $96,170.
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 some of the buildings.
Schrimmer Insurance was able to secure five 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 | $89,795 | |
| Quote 1 | Travelers Property Casualty (RECOMMENDED) | $5,000 | $96,170 | |
| Quote 2 | Everest | $25,000 | $129,880 | |
| Quote 3 | Great American | $10,000 | $134,166 | |
| Quote 4 | RSUI | $25,000 | $136,980 | |
| Quote 5 | Markel | $10,000 | $175,000 | |
Travelers’ proposal (Quote 1) for all properties represents a premium increase of $6,375 from the City’s current annual premium of $89,795.
Staff rejected Quotes 2 and 5 from Everest, Great American, RSUI, and Markel respectively, 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 $60,017,503 (up from $57,962,996 last year due to an increase in construction cost in the State of California), and maintains the current $5,000 deductible at an annual premium of $96,170.
FISCAL IMPACT/SOURCE OF FUNDING:
The premium for property insurance coverage has been included in the adopted Fiscal Year 2020-2021 budget. Staff recommends acceptance of the pricing proposed by Travelers Property Casualty with a $5,000 deductible at an annual premium cost of $96,170 for the City’s property insurance policy coverage. This represents an increase of $6,375 from the City's current annual premium. Sufficient funds are available in the City's adopted Fiscal Year 2020-2021 budget for this premium.
GENERAL PLAN RELEVANCE:
General Plan Goal LU 17.1 Adequate Community Supporting Uses.