HomeMy WebLinkAbout21 - Property Insurance Program RenewalCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 21
February 26, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Human Resources, Lauren F. Farley, Risk Manager, 949- 644 -3302
Ifarley(&city. newport-beach.ca. us
SUBJECT: Property Insurance Program Renewal
Issue:
Should the City Council authorize the expenditure of $694,597 for the property
insurance program renewal?
Recommendation:
Approve the renewal of the property insurance program with a total premium of
$694,597 for a total insured value of $ 144,240,972.
Background:
The City purchases five different types of property insurance, master Property (including
boiler & machinery), Earthquake, Flood (Difference in Conditions Coverage), Crime, and
Watercraft. These types of policies provide the city with a broad coverage base to
protect the city's real & personal property and its monetary assets. The attached
property schedule shows the City's covered real & personal property interests.
Renewal Quotation:
Our renewal process begins early with our broker, Mark Zahoryin of Brown & Brown
always in search of broader coverage at the best possible premium. The property
insurance market continues to rebound from the catastrophe losses earlier in the
decade which is reflected in the favorable premium. Again, the Earthquake and Flood
(Difference in Conditions — DIC) premium for the Newport and Balboa piers is included
for no additional premium.
Property Insurance Renewal
Council Agenda — February 26, 2008
Page 2
The 2007 and 2008 premium comparison for the City's Property Insurance Program is
listed in the chart below:
Fundihn Availability:
Funds which cover the recommended expenditure are in the Internal Services Budget —
Insurance Reserve Fund, # 3020 -8715, 8721 & 8726. The renewal premium of
$694,597 is $106,247 less than the 2007 premium and is approximately 75% of the FY
07108 budget amount of $920,000.
Prepared by:
Submitted by:
Barbara Ramsey, HR Director
2007
2008
% Difference
Master Property
$84,893
$79,036
7% decrease
Earthquake & Flood
$645,094
$544,655
16% decrease
26% increase due
Watercraft
$32,121
$40,456
to acquiring a new
lifeguard boat in
2007
Crime
$38,773
$30,450
12% decrease
Total Premium
$800,844
$694,597
Overall decrease
of 13%
Fundihn Availability:
Funds which cover the recommended expenditure are in the Internal Services Budget —
Insurance Reserve Fund, # 3020 -8715, 8721 & 8726. The renewal premium of
$694,597 is $106,247 less than the 2007 premium and is approximately 75% of the FY
07108 budget amount of $920,000.
Prepared by:
Submitted by:
Barbara Ramsey, HR Director