HomeMy WebLinkAboutS17 - Property Insurance Program RenewalCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item S17
February 22, 2005
To: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
From: Human Resources, Lauren F. Farley, Risk Manager, 949 - 644 -3300
Ifarley@city.newport-beach.ca.us
Subj: Property Insurance Program Renewal
--------------- - --
Issue
Does the City Council authorize the expenditure of $559,962 for the property
insurance program renewal?
Recommendation
The City Council approves the renewal of the entire property insurance coverage
program for a total premium of $ 559,962.
Background
The property insurance market has continued to stabilize since the FY02 /03
renewals when increases were as high as 125% across the state of California in
the public sector. The City's property renewal is approximately an 11 % decrease
in premium rates from the previous policy year.
Renewal Quotation
The renewal process begins approximately ninety (90) days prior to the
expiration of the insurance coverage. This process can continue right up to the
expiration of the existing coverage (March 1St ) depending on the availability of
the markets, the underwriters need to clarify and obtain more information on our
application and our broker continuing to press for the best possible premium for
the new policy. Our broker, Mark Zahoryin of Brown & Brown, selects the
markets that have municipal property experience, depth of coverage and
competitive annual premiums.
The City purchases property insurance for all its real and personal property
assets (Attachment A — Property Schedule) consisting of All Risk, Boiler and
Machinery, Earthquake, Flood, Watercraft and Crime coverage. The Crime
Policy is intended to cover monetary loss from employee theft and
embezzlement.
Page 2
The two year premium comparison for the city's real and personal properties for
All Risk, Boiler and Machinery, Difference in Conditions (Earthquake and Flood),
Watercraft, Crime and Earthquake & Flood for the Newport and Balboa piers is
listed in (Attachment B — Two Year Premium Comparison).
Funding Availability:
Funds which cover the recommended expenditure are in the Internal Services
Budget— Insurance Reserve Fund, # 6020 -8721 and the FY 04/05 budgeted
figure is $ 628,220. The expenditure recommended encumbers 89 % of this
budgeted amount.
Prepared by: / Sub d by:
Lauren F. Farley, Risk l anager Diana Axley, HR Director
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