DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Renew Commercial Automobile Insurance Contract With Travelers Insurance
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PURPOSE/ACTION REQUESTED
Authorize the Enterprise Finance and Information Services Director to renew the commercial automobile insurance contract with Travelers Insurance (Travelers).
SUMMARY
While Dakota County (County) is self-insured for general liability exposures, the County purchases several types of commercial insurance (property, crime, and auto) where it makes financial sense. The County’s auto insurance policy with Travelers is up for renewal on July 1, 2024. Marketing of the auto insurance and benchmarking with other metro counties confirms that Travelers pricing for the County is still competitive.
The auto insurance market for public sector has significantly hardened due largely to insurers adversity to insuring the risks associated with law enforcement vehicle liability and the County’s options for vehicle insurance have been dramatically impacted by this. In an effort to manage these challenges, Risk Management worked with our insurance broker to pursue quotes that reflected higher/additional deductibles to obtain the most cost-effective options. Our insurance broker was unable to solicit any comparison bids and Travelers, our long-standing insurer, has indicated that if the County does not elect to renew coverage with Travelers, they would no longer quote our line of business for coverage in the future.
Travelers insurance provided a quote of $470,506. The premium quote with Travelers reflects a 33 percent increase from last year’s premium and equates to an increase of $267 per unit. This increase reflects current conditions in the public sector auto insurance market as well as the County’s most recent loss history (2021-2023), which increased from the previous three-year period.
The Travelers policy provides a per claimant limit of $500,000 and a per accident limit of $1,500,000 consistent with the County’s liability limits under Minn. Stat. § 466.04. For Dakota County’s 2024 renewal, Traveler’s quote also includes a $25,000 liability deductible. Physical damage coverage would continue with a $5,000 deductible for comprehensive and collision. At this deductible level, Risk Management staff manage all claims for liability and physical damage less than $25,000 which accounts for over 90 percent of the County’s claims. The liability deductible will help insulate the County from increased future premiums due to minor liability and physical damage losses.
Risk Management has a long-standing practice of identifying preventable losses and working with departments and Employee Relations to implement corrective action to prevent reoccurrence. Staff will continue to work with departments that have experienced the most frequent losses to improve driver performance and reduce physical damage claims. Risk Management also tracks claim trending and there has been a notable reduction in the frequency and severity of losses over the last twelve months.
RECOMMENDATION
recommendation
Staff recommends the Board authorize the Enterprise Finance and Information Services Director to renew the commercial automobile insurance contract with Travelers for policy year July 1, 2024 - July 1, 2025 for $470,506.
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EXPLANATION OF FISCAL/FTE IMPACTS
The required funds of $470,506 are included in the Office of Risk Management 2024 insurance budget.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Dakota County purchases insurance for automobile physical damage and liability coverage; and
WHEREAS, the current policy on automobile 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 automobile insurance coverage with Travelers Insurance.
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:
Automobile Insurance
Travelers Insurance July 1, 2024 - July 1, 2025 Premium $470,506
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PREVIOUS BOARD ACTION
23-288; 06/20/23
ATTACHMENTS
Attachment: Auto Insurance Premium Renewal Summary
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