| | | | | | | | City of Independence | AGENDA ITEM COVER SHEET |
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| | | | | | | | Agenda Title:
Approval of 2023-24 Property Insurance Renewal for City Utility Property |
| | | | | | | | Recommendations:
Staff recommends approval with an estimated annual premium of $768,424 for utility property which reflects an overall 10% increase made up of an 5% increase in insured values and a10% rate increase. The premium includes the estimated annual engineering services and the carrier’s mutual participation share in the form of a Conventional Property credit in the amount of $11,499. The expiring annual premiums with service fees/policy credits was $664,330. |
| | | | | | | | Executive Summary:
The 9/1/2021-2022 Utility property insurance proposals are the result of an extensive effort by Lockton, Charlesworth, and staff to maintain suitable coverage at a reasonable price and getting this back onto a July 1 fiscal insurance renewal with the balance of the City’s insurance key programs. The property insurance market continues to be very difficult with utility properties. Each year, Lockton works heavily with numerous insurers to secure the most favorable coverage conditions at a competitive cost – this year being an even more diligent effort with fewer insurers interested in utility properties. The policy coverages remain competitive, with loss valuations on a few sub-stations modified due to age of units. |
| | | | | | | | Background:
Lockton approached the renewal carriers earlier than normal this year to secure a strong renewal void of having to market the program in consecutive years which weakens the City’s ability to secure stable insurance programs. The property insurance market continues to pose challenges, with coverage limitations, increased deductibles and higher premiums. This is true for the City’s renewal last year, but much more palatable for this renewal, yet it was still difficult to secure quotes early due to insurer capacity.
For the Utility property, the City has historically had a quota share program, where several carriers provide coverage, and each take a portion of the risk. Each carrier has slightly different terms, limits, and deductibles. Again, this year, the quotas, carriers and terms remained as per the current program. The Blue Valley Power Plant continues to be covered at actual cash value, not replacement cost, because the City will not rebuild the plant in the event of a total loss.
Risk Management’s Utility Property goals this year was working with the insurance loss control representative conducting on-site visits. Several were conducted just these past few months with what we consider positive suggestions. |
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Fiscal Impact:
The fiscal impact to the three utilities is $768,424. The insurance premium is included in the 2023-2024 Proposed Budget, page 152, Risk Management Fund 093, account 4293-5207. The premium is then allocated to each department based on their actuarial impact to the premium.
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| | | | | | | | Department: Finance | Contact Person: Cindy Gray |
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REVIEWERS: | Department | Action | Finance Department | Approved | Finance Department | Approved | City Managers Office | Approved | City Clerk Department | Approved |
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Council Action: | Council Action: |
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