sr-051871-8jCITY OF SANTA MONICA
,~ .
~.~~., DATE: April. l5, 1971
~~
~`~tir:, TO: The Honorable City Council
°~,,, FROIvI: City Manage r
SUBJECT; Excess Insurance for Automotive Fleet
71-C-28
We have obtained an alternative quotation of annual premiums for the following
coverages:
1. $950,000.00 Excess over
$ 50,000.00 $40,000.00
2. $925,000.00 Excess over
$'75,000.00 $30,000.00
3. $900,000.00 Excess over
$loo,ooo,oo $15,000.00
Plus 3 1/2% policy fee for plan accepted.
The Santa Monica Association of Insurance Agents, represented by Mr. Garl
Tegner, recornsnends that the City purchase the policy for $900, 000 excess over
the $100, 000 for the yearly premium of $15, 000. As indicated in the attached
report (71-C-15, February 10, 1971) for the period of 19b8-1971, the City ob-
tained $990, 000 of excess coverage above $10, 000 self insurance at an annual
cost of $8, 335 per year.
The only purpose in acquiring such coverage is protection against
a catastrophic loss. Accordingly, the question xevolves around
whether it is worth $15, 000 annually to the City to obtain some pro-
tection against losses which may potentially exceed the first $100, 000.
The administration does not feel strongly about the issue. Gbviously,
catastrophic losses are possible, but the cost of obtaining such
coverage is extremely high.
As a general proposition, we think the City can afford to be fully self insured
under such circumstances. However, before acting on this matter, the Citg~
Council should seriously consider the recommendation of the Ins uraa~~eei;~a.g~nts
Association. ro~~t~~ ~
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- R --SCOT City Manager T~~R~ D S n; _, ,~
PS: j C1TZ'Fpg~LIr~J
attachments {2)
Information
CITY OF~SANTA MONICA 71-G-21
DATE: March 17, 1971
TO: The Honorable City Council
FROM: Perry Scott, City Manager
SUBJECT: Excess Insurance for Automotive Fleet
Attached hereto is the only additional quotation for such excess coverage
that has been obtained by the Insurance Agents Association. As you know
from the quotation, the insurance companies still want $15, 000 pe.r year
for excess coverage above the first $100, 000 of each claim to be paid by the
Gity.
In the event the Council wishes to purchase excess insurance under these
conditions, the matter should be scheduled for whatever Council meeting
you consider most appropriate,
PERR 'COTT, Gity Manager
PS:cg
cc: Attorney
Controller
Attachment
CARL E. TEGNER
CHAS. B. SPURGIN
IAN M. GRANT
~~(/, / ,,
SINCE 1902
_ r i a .f
A7arch 16 , 1971
Mr. Frank Gaudio
City of Santa ;?onica
1685 '-lain Street
Santa P?onica, California
Re: Excess Ouote - Automotive Fleet
Dear Frank:
210 SANTA MONICA BOULEVAflO
SANTA MONICA. CALIFORNIA 90406
PMO NE: 451-0800
In reply to your telephone inquiry cae have one quote
through Reserve Insurance Company as follows, for a
one (1) year term:
1. $950,000.00 Excess of
$50,000.00 $30,000.00
2. S9?_5,000.00 Excess of
$75,000.00 $22,500.00
3. 5900,000.00 Excess of
$100,000.00 $15,000.00
quote telephoned. this A.M., good for ten (10) days.
One market has not replied., but hope for an early report.
Sincerely,
.~-•
~~, ~~~~
Carl E. Tegrier
Santa i•Sonica Assn. of Ins. Agents
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CET/js
INFORMATION
CITY OF SANTA MONICA 71-C-15
DATE:. February 10, 1971
TO: The Honorable City Council
FROM: City Manager
SUBJECT:' Insurance Coverage for Liability in Excess of $10, 000 Self-
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 fora $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 1/2 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.
ERR GOTT, City Manager
PS:j
cc: Carl Tegner
Frank Gaudio
Chris New