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Item No. 3.
| MEETING DATE: 02/22/2022 |
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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 |
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, 2022, through March 1, 2023, with a $5,000 deductible at an annual premium cost of $108,110.
DISCUSSION:
The City’s Property Insurance policy provides coverage for City buildings and their contents against theft, damage, and fire. The current Property Insurance policy expires on March 1, 2022. 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 (7) insurance carriers for pricing proposals; however, three (3) carriers declined to quote due to the age of the buildings.
Schrimmer Insurance secured four (4) 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:
Schrimmer Insurance secured four (4) 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 | $96,170 | |
| Quote 1 | Travelers Property Casualty (RECOMMEND) | $5,000 | $108,110 | |
| Quote 2 | Great American | $10,000 | $140,285 | |
| Quote 3 | RSUI | $25,000 | $153,786 | |
| Quote 4 | Markel | $10,000 | $175,000 | |
The proposal from Travelers Property Casualty (Quote 1) represents a premium increase of $11,940 from the City’s current annual premium of $96,170. After review, staff rejected Quotes 2 through 4 from Great American, RSUI, and Markel respectively, due to significantly higher deductibles and premiums than the Travelers’ proposal.
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 $62,892,403 (up from $60,017,503 last year due to an increase in property valuation, an increase in construction cost, and adding three recently acquired properties), and maintains the current $5,000 deductible at an annual premium of $108,110.
FISCAL IMPACT/SOURCE OF FUNDING:
The premium for property insurance coverage has been included in the adopted Fiscal Year 2021-2022 budget. Staff recommends acceptance of the pricing proposed by Travelers Property Casualty with a $5,000 deductible at an annual premium cost of $108,110 for the City’s property insurance policy coverage. This represents an increase of $11,940 from the current annual premium. Sufficient funds are available in the City’s adopted Fiscal Year 2021-2022 budget for this premium.
GENERAL PLAN RELEVANCE:
General Plan Goal LU 17.1 Adequate Community Supporting Uses.