HomeMy WebLinkAbout2001 11 12 Consent A Renewal of All Liability Coverages, Property Damage and Workers Compensation
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COMMISSION AGENDA
ITEM A
CONSENT X
INFORMA TIONAL
PUBLIC HEARING
REGULAR
11/12/01
Meeting
MGR. ~ illEP~
Authorization
REQUEST: It is requested that the City Commission approve stafrs
recommendation to renew liability and property damage insurance coverages for FY 02
through Coregis and AIG, and to authorize a change in the workers compensation
insurance carrier effective January 1, 2002, from the Florida Municipal Insurance Trust
(FMIT) to the Preferred Governmental Insurance Trust (PGIT).
PURPOSE: This agenda item allows for the renewal of all liability coverages, property
damage, and workers compensation insurance through September 30,2002.
BACKGROUND:
1. Through Risk Management Associates (RMA) of Altamonte Springs, the market
of public entity insurers was asked for quotes on the full range of our property
and casualty coverages. The results of that effort are outlined on the first page of
the attached letter from Paul Dawson of RMA.
2. The second page of that same letter lists the comparison of premiums from FY
00-01 to FY 01-02, with the following explanations for corresponding increases
and decreases:
Property Damage-the premium decrease of $4,535 (-25.5%) reflects a good loss
record plus revisions in the property schedule which cut
most underground structures and appurtenances that have
Iittle-to-no exposures. The slight rate change per $100 of
value had no appreciable effect.
Automobile Liability-the premium increase of$15,631 (+37.8%) reflects 27 more
vehicles which had not previously appeared on our
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Consent Agenda Item "A"
City Commission Meeting
November 12, 2001
schedule. The vehicle schedule had not been updated
since 1998. To minimize the premium increase,
physical damage coverage was removed from all those
vehicles over 5 years old. A rate increase per vehicle
also had a negative impact.
General Liability-the premium increase of $7,899 (+18.4%) reflects higher city
operating expenditures, which is the major factor used by
underwriters in determining GL premiums. The small rate
increase per $100 of net operating expenditures had a very
minor negative impact.
Public Officials Liability-the premium increase of $7,305 (+16.5%) reflects concern by
carriers over our losses during the past 4 years. A rate
increase also impacted the renewal premium.
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3. RMA also submitted a proposal for workers compensation coverage through the
Preferred Governmental Insurance Trust (PGIT) which offers substantial
savings over the program by the Florida Municipal Insurance Trust (FMIT).
For the Period 10/0112001 through 9/30/2002
FMIT
PGIT
$ 361,421
328,208
Difference
33,213
Unfortunately, the PGIT quote was received after $85,184 had already been
paid to FMIT for the quarter October 1, 2001 through December 31,2001. In
addition, FMIT would have imposed a short rate cancellation penalty of
$36,142, for not providing notification of cancellation 45 days prior to the
effective date of cancellation.
Staff has concluded, however, that substantial savings caD still be realized by
providing immediate notice of cancellation, to be effective December 31, 2001,
with PGIT providing coverage effective January 1,2001. Cost and savings
calculations are as follows:
For the Period 1/01/2001 through 9/30/2002
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FMIT
PGIT
$ 276,237
246,156
Difference
30,081
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Consent Agenda Item "A"
City Commission Meeting
November 12,2001
It should be noted that premium quotes from both trusts reflect a substantial
increase in city payroll, an increase in the city's Experience Modification, and
higher state-approved classification code rates per $100 of payroll. Also,
awarding this coverage to PGIT further reduces the property and
liability premiums by $3,227 (already reflected in the "Total Premium"
figure on the "Premium Recapitulation" page), and would not be pro-rated
or otherwise affected by an award effective January 1,2002.
4. The following represents budgeted and actual premiums for FY 00-01 and
for FY 01-02 (if approved):
Budgeted
00-01
Actual
00-01
Budgeted
01-02
Proposed
01-02
Property Damage
and Liabilities $ 163,750
$146,390
$161,000
$166,193
Workers Compo
253,000
227,696
340,738*
328,208*
Totals
416,750
374,086
501,738
503,433 * *
* -- Annual premium amounts subject to pro-ration calculations as outlined in
3. above.
** -- Staff recommends $1,000,000 coverage with $100,000 deductible for Public
Officials Liability coverage, a continuation of current policy limits. The
small difference of $1,695 between the FY 01-02 premium amounts
budgeted versus proposed premiums to be paid can easily come from the
"Insurance Settlements" line item of the Risk Management budget, which
is othenvise used to pay claims within our deductibles. The Commission
can further decide to reduce or increase deductibles, which will have
corresponding - but inverse - effects on premiums.
RECOMMENDATIONS:
It is recommended that the proposal by Risk Management Associates which includes
liability and property damage coverages by Coregis Insurance, public officials liability
coverage by AIG, and Workers Compensation coverage by PGIT, at a total net premium
of $503,433, be accepted.
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Consent Agenda Item "A"
City Commission Meeting
November 12, 2001
A TT ACHMENTS:
1. Letter dated October 1, 2001, from Paul Dawson, Risk Management Associates
2. Premium Capitulation, Risk Management Associates
COMMISSION ACTION:
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Oct-OB-Ol 09:55A
P.02
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RMA
Ri~k Management Associates
October I, 200 I
Gem.: D~Marie, General Services Din:ctor
City of Winter Springs
Winter Springs, florida
Dear Gene,
Pkasl.: linJ enclosed the property, liahility and workers' comp~nsation insurance
proposal for the City of Winter Springs.
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As is the standard procedure for Risk Management Associates (RlvtA), we solicited
seven'! other insurance carriers tor insurance yuotes on your bchal f. I have
summarized their responses below. There arc only three companies and one self.
insured pool currently writing property und liability insurance for public entities in
Florida. They arc Corcgis, Sl. Paul Argonaut and Florida Municipal Insurance Trusl
(PM I"). RMA has direct access to all except FMIT.
Sl. PaullnslIrance Co. ..' Not competitive with the renewal premium. Decline<i to
givl:: a quote hased on Coregis premium and covemges.
Argonaut In~urance Co. Callnot wrile property 011 an admitted basis in the State of
Florida. Coregis and St. Palll will not write stand-alone property policies. Florida
insuranl.:c law prohibits LIS from placing coveragl.: with a non-admitted carrier when
an admitted carrier will provide the coverage;'
~.Q.[e~is- Quote renewal at $121,193
Public Onicials' Li~lhility' ca'iTie'rs' approached were as f()'IJows.
Cort~~is - Declined due to paslloss experience
Z.Jd[.i.~lt. Declined due to past loss experience.
St. Paul - Will not write stand-alone Public Officials' Liability coverage.
^n.:onaul- Will not write stand-alone Public Omcials' l.iahility coverage.
United National Declined due lo loss experience.
AIG .. Quoled renewal at $51,500.
Please find on the attached page a summary of premium and exposure changes from
last year to this year for your review.
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Commcn:iaJ Insurance. Hond.s . Ri.c;k Management Service!". . Pro~ram Design and Adrnini!itration
r.O f,,)X I tj I J07 . All,:onll)f1(I~ sprine::., Flori(I,} :I ;171 (,-1507 . P/)onc; (107) 33 1-1~OO . h')(~imil(~; (1(17) 33' ..1H()(l
OCT-08-2001 11:16
96%
P.02
Oct-Oa-Ol 09:55A
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Pmpert y i.r:tcluding bui Idings/ contcnW. inland marine! hoiler & Cllach..i.pery
00-01 TlV $15,Xl\7, 751 Premium S 17,759 Rate $.0012 per $1 on val LIe.
01-02 TIV $10,718.376 Premium $13,224 Rate $.0123 per $1 no value.
10'Yo increase
Autol11obill:; L-jability
00-01 113 vehicles
01 -02 140 vehicles
Premium $ 41,304
Premium S 56,935
Rate $366 per vehicle.
Rate $407 per vehicle.
11 % increase
General Liability
00-01 $11.458,457 net expenditures Premium $42,882
01-02 $12,334,895 net expenditures Premium $50,781
Rate $.374 per $100
Rate $.412 p~r $1 00
10% increase
Puo lie Omcial's ~iabilitv
00-01 $11,458,457 net expenditures Premium $44,195
01-02 $12,314,895 net expenditures Premium 551,500
Rate $.386 per $100
Rare $.41 ~ per $100
9% increase
Crime
00-01
01-02
Premium $249
Premium 5253
2% increase
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Total Premium
00-01 5146,390
01-02 $172,693
J 8% increase
1 realize the gross premium is more than anticipated. Please reali7.e that the above
final premiums are a result of several negotiatiuns with Coregis and AIG to reduce
premiums from [heir original renewal quotes released to RMA. R.\1A has also
r~dUl.:ed their commission in order to get premiums clos<;:r to the City's hudget.
When we indicated renewal premiums to the City several months ago, we did not
anticipate the addition of27 vehicles and the unwillingness of public officials'
liahility can-ien; to "illote the City's husiness.
Please feel free to check with other neighboring cilie!' to deLennine if Lhe above
increases are in line with their experience.
Regards,
P~r:> ..---
Paul Dawson
Senior Account Executive
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nrT-~O-~~~1 11: 1h
qc.'..-:-
P.03
Pel,
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RMjA
Risk Managemel t Associates
City of \Vinter Springs
PREMIUM RECAPITULATION
Annual Premium
Property (including equipment breakdown)
$11,488
Inland Marine
$ 1,736
Crime/Employee Dishonesty
$ 253
General Liability, Law Enforcement, and
EMT /Paramedics
$ 50,781
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Automobile Liability and Physical Damage
$ 56,935
Public Officials Liability
($500,000 limit, $100,000 deductible
(l, 000, 000 limit $100,000 deductible
Workers' Compensation
$ 47,500
$ 45,000)
$ 51,500)
$328,208
Accidental"'Death & Dismemberment ,. .n. - __n _u_ -'h" ,-" - ... $ " - 2,515"
FEMA and Florida State Fire Marshall Surcharges
$
17
Total Premium:
$499,433
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Notes of Importance:
. Property and Liability premiums include a $3,227 credit when Workers' compensation
coverage is purchased.
. Signed acceptance of proposal required to bind coverage
. Signed statement of values required to bind coverage
. Signed Pub lie Officials Liability application required to bind coverage
. Signed pollution applieation required to bind coverage
. Property appraisal required within 60 days of policy effective date
. Signed uninsured motorists form required
The brief description of insurance coverage contained in this proposal is being provided as an accommodation only and
is not intended to cover or describe all policy terms. For more complete and qetailed infonnation relating to the scope
and limits of coverage, please refer directly to the policy documents. Specimen forms are available upon request.