|In September 2013, at the conclusion of a comprehensive Request for Proposal (RFP) process related to the provision of property, liability and workers’ compensation insurance and risk management services for the Township, the Board of Directors selected Texas Municipal League Intergovernmental Risk Pool (TMLIRP) as the Township’s insurance provider.
The Township’s current property, liability and workers’ compensation policies will expire on January 1, 2019. The Township has until February 28, 2019 to accept the renewal quotes summarized in this Executive Summary or to request revised quotes based on different deductibles and/or coverage levels desired by the Board.
A summary of the types of insurance coverage and corresponding premiums, deductibles and limits of liability included in the renewal quotes is attached for review. In total, the Township’s annual premiums are decreasing by $19,211, or 3.3%. This net decrease in insurance expense is comprised of a $22,659 increase in property and liability insurance premiums offset by a $41,870 decrease in workers’ compensation, as outlined in the following two paragraphs.
Property and liability insurance premiums are increasing by $22,659, or 5.3%, from the current year total of $428,933 to the renewal total of $451,592. The quotes are based on maintaining the same level of deductibles for all policies and maintaining the same limits of liability for the general liability, errors and omissions, automobile liability, boiler and machinery, and crime policies. However, the limits of liability have increased for the automobile physical damage, real and personal property, and mobile equipment policies based on the addition of approximately $4.4 million of new assets and adjustments to replacement cost values. A 15.0% flood rate increase and a 5% general rate increase for Real & Personal Property insurance, as well as a 10.0% increase for Auto Physical Damage also contribute to the increase in property insurance premiums. The increases in rates are based on activity within the entire TML insurance pool, which has experienced severe losses over the last few years due to several significant weather events. In particular, losses from flooding events have negatively impacted the fund.
For the Township’s workers’ compensation policy, TMLIRP has provided a renewal quote of $104,118, which is $41,870, or 28.7% lower than the current premium of $145,988. The premium is decreasing based on the Township’s loss history over the past three years.
Ms. Carolyn Miller of RWL Group, the Township’s insurance consultant, has reviewed the renewal quotes from TMLIRP and recommends Board approval.