DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Renew Commercial Property Insurance Contract With Affiliated FM Insurance
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PURPOSE/ACTION REQUESTED
Authorize the Enterprise Finance and Information Services Director to renew the commercial property insurance contract with Affiliated FM Insurance Company (Affiliated FM).
SUMMARY
While the County is self-insured for general liability exposures, we purchase several types of commercial insurance (property, crime, and auto) where it makes financial sense. The property insurance policy is up for renewal on July 1, 2024.
Total property values increased from $577,019,612 to $610,727,404 since the last policy renewal. The increase reflects the addition of the Kaposia Library as well as a 4% increase to all property values to account for inflationary increases that would impact replacement costs to properties in the event of a loss.
Affiliated FM, the county’s long-standing property insurer, issued an annual premium quote of $437,779. The quote reflects a $.004 per $100 increase from the 2023 renewal rate and a composite rate of $.072 per $100 of property value. The $.004 increase is a positive renewal quote given insurance industry reports indicate an average of 7.7 percent premium increases through Q1 2024.
The property insurance coverage includes a $25,000 per loss deductible as well as several other specified wind/hail deductibles and coverage limits listed by property location. Attachment A provides additional details on these.
With several capital improvement projects underway, the 2025 total insurable property values for the County will increase by approximately $45,542,000.
RECOMMENDATION
recommendation
Staff recommends the Board authorize the Enterprise Finance and Information Services Director to renew the commercial property insurance contract with Affiliated FM for the policy period July 1, 2024 through July 1, 2025 for the cost of $437,779.
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EXPLANATION OF FISCAL/FTE IMPACTS
The required funds of $437,779 are included in the Office of Risk Management 2024 property insurance budget.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Dakota County purchases insurance for property losses; and
WHEREAS, the current policy on commercial property insurance will expire on July 1, 2024; and
WHEREAS, an evaluation of the marketplace for competitive pricing was completed; and
WHEREAS, based on the evaluation of the marketplace, staff is recommending renewal of the commercial property insurance coverage with Affiliated FM Insurance Company.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Enterprise Finance and Information Services Director to purchase the following insurance to be paid at current rates from the Office of Risk Management insurance budget:
Property Insurance
Affiliated FM July 1, 21024 through July 1, 2025 Premium $437,779
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PREVIOUS BOARD ACTION
23-289; 06/20/23
ATTACHMENTS
Attachment: Property Insurance Rate Comparison
BOARD GOALS
☒ A Great Place to Live ☐ A Healthy Environment
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Jenny Groskopf
Author: Sarah Fenske