HomeMy WebLinkAbout1989-11-07; City Council; 10329; Renewal of vehicle damage insuranceCIT^OF CARLSBAD — AGEND/^3ILL £
MTG 11/7/89
DEPT..RM
RENEWAL OF VEHICLE PHYSICAL DAMAGE
INSURANCE
DEPT.
CITY A
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RECOMMENDED ACTION:
Approval of Resolution No. 8^-3^7 authorizing the renewal of the Vehicle
Physical Damage Insurance Coverage in accordance with staff recommendations
at a premium deposit of $16,540.
ITEM EXPLANATION
The current Vehicle Physical Damage Insurance Coverage expired on October
1, 1989. New coverage has been bound pending Council action on the
proposed renewal.
The Vehicle Physical Damage Insurance Policy provides comprehensive
coverage for owned and hired vehicles valued at $20,000 or more, subject to
a $1,000 deductible per vehicle per loss. Vehicles valued at less than
$20,000 are covered by the City's Property Insurance Policy.
By transferring this risk to the Property Insurance Policy, the City will
benefit from a substantial reduction in the combined premiums for both
policies.
The recommended quotation is Option I from Fireman's Fund. They provided
the prior year's coverage and carry a rating of A:XIII in the 1989 Best's
Key Rating Guide.
There are five significant differences between Options I and II.
OPTION I OPTION II
Fireman's Fund
Rated: A:XIII
1. The premium is $16,540.
The provider is an approved and
admitted carrier in California.
In the event of its insolvency,
the City would be able to apply
to the California Insurance
Guarantee Fund for recovery of
any losses.
Industrial Insurance Co. of
Hawaii
Rated: A:XIV
The premium is $15,168. That is
$1,372 less than Option I.
The provider is an approved but
non-admitted carrier in
California. In the event of its
insolvency, the City would absorb
all losses.
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3. The cost of adding collision The cost of adding collision
coverage is considered to be coverage is $3,956.
extremely unreasonable.
4. The deductible is $1,000. The deductible is $5,000.
5. Option I is only available in Option II is available as a stand
conjunction with the provision alone policy.
of Property Insurance Coverage.
It is the recommendation of the City's Insurance Broker and the staff that
Option I be selected. The main reasons for the recommendation are the
insolvency protection offered by the California Insurance Guarantee Fund
and the lower deductible.
FISCAL IMPACT
Number of Vehicles Value of Deposit
Fiscal Year Covered Vehicles Covered Premiurn
1988/89 89 $2,072,912 $23,688
1989/90 19 $1,208,227 $16,540
The recommended proposal contains a deposit premium reduction of $7,148
from the prior year. It is reflective of the adjustments in coverage made
between this policy and the Property Insurance Policy.
The final premium will be calculated after a year end audit. It is based
upon the number and value of vehicles covered.
Funds are available in the Insurance Premium Account for payment of the
deposit premium.
EXHIBITS
1. Resolution No.
2. Vehicle Physical Damage Insurance Proposals
1 RESOLUTION NO. 89-379
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, AUTHORIZING RENEWAL OF
3 THE CITY'S VEHICLE PHYSICAL DAMAGE INSURANCE COVERAGE
4 WHEREAS, The City has previously maintained Vehicle Physical
5 Damage Coverage for its fleet; and
6 WHEREAS, The City's Insurance Broker has received quotes for the
7 continuation of that coverage; and
8 WHEREAS, Upon evaluation of the quote for Vehicle Physical Damage
9 Insurance, the City desires to renew its insurance.
10 NOW, THEREFORE, BE IT RESOLVED by the City Council of Carlsbad,
11 California as follows:
12 i. That the above recitations are true and correct.
13 2. That the renewal of the City's vehicle physical damage
14 insurance with Fireman's Fund Insurance Companies is hereby approved and
15 the Finance Director is authorized to issue a warrant for the deposit
16 premium of said renewal in the amount of $16,540.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City
Council of the City of Carlsbad on the 7th day of November . 1989,
by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: None
:AUDE A. LEWIS, Mayor
ATTEST:
at
ALETHA L. RAUTENKRANZ, City Clerk\
EXHIBIT NO. 2
VEHICLE PHYSICAL DAMAGE PROPOSALS
Coverage: 19 Vehicles Valued over $20,000 per schedule attached.
$ 150,000 Maximum Value per Vehicle
1,208,227 Maximum per Occurrence
20,000 Sublimit - Vehicles hired or borrowed from
other cities
Waiver of Subrogation - Cities of Oceanside
and Vista
Includes CB Radios
Scheduled Policy - All Changes to be made
by endorsement.
Option I
Firemans Fund (A XIII)
Comprehensive Only
$1,000 Deductible except fire or lightning
Actual Cash Value or Cost of Repair
whichever is less
Annual Premium:
(Available only if Property Option I is selected)
$16,540
Option II
Industrial Ins. Co. of Hawaii (A XIV)
(Crum & Forster Group)
"All Risks" including Flood and Earthquake
$5,000 Deductible
Valuation: Lesser of (A) the stated amount;
(B) the actual amount required to repair or replace;
or (C) the limit stated above less the deductible.
Annual Premium:
Excluding Collision: $15,168
To Add Collision: $ 3,956
Note: Industrial Ins. Co. of Hawaii is an approved, non-admitted
carrier. The California insurance Guarantee Fund does not
apply to this company.
09-29-89/lsr