sr-030971-8e~~
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~~ INF TION
~ '' CITY OF SANTA MONZCA 7 -C_1 -
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"~~~ DATE: February 10, 1971
TO: The Honorable City Council 13tw~.~ ~~~I
FROM: City Manager '9
SUBJECT; Insurance Coverage for Liability in Excess of $10, X60'5"el"f"- v
Insurance for the City's Automotive Fleet Excluding the
Transportation System.
From January 31, 1968 through January 31, 1971 the City obtained $990, 000
excess liability insurance coverage above the $10, 000 self-insurance carried
by the City. The cost of this coverage during the three years was $8, 335 per
year which was a reasonable cost to insure against a catastrophic loss sub-
stantially exceeding the $10, 000 self-insurance.
The attempted renewal of this coverage through the Santa Monica Association
of Insurance Agents has been quite unsuccessful at a reasonable cost. The
best quotation we have obtained to date is £or a $39, 000 annual premium with
the City carrying the first $25, 000 of liability as self-insurance.
Our lowest quotation is 4. 7 times our previous cost and the amount
of self-insurance required is 2 l~/2 times the previous amount.
In the opinion of the administration, this is most unreasonable in that in the
past the City's business has been profitable with practically all claims being
paid under the $10, 000 self-insurance. Accordingly, our coverage has lapsed,
although we are still attempting to obtain a responsible rate. In the event we
are unable to obtain a more responsible cost, the City Council must determine
at the February 23 Council meeting whether we should continue as wholly self-
insured or pay the rates quoted for the minimum coverage in the event of a
catastrophic loss.
ERF~ OTT, City Manager
PS:j
cc: Carl Tegner
Frank Gaudio
Chris New