Lodi to see changes in liability, property insurance premiums

April 06--The City of Lodi is expecting a 10-percent reduction in its general liability insurance premiums in the 2018-19 fiscal year, now that Vallejo has withdrawn as a member of the California Joint Powers Risk Management Authority.

Although the city will see a reduction in general liability premiums, property insurance premiums are anticipated to increase from 7.5 percent to 20 percent as a direct result of the losses incurred across the insurance market due to hurricanes, earthquakes, flooding and fires.

The California Joint Powers Risk Management Authority is a liability risk retention pool made up of about 21 members and representing at least 100 cities within the state of California, according to Lodi City Attorney Janice Magdich.

Through the pool, the city receives general liability, property and auto physical damage insurance coverage.

While the premiums for the next fiscal year have not been determined yet, Magdich said the city's general liability premium was $246,402 for the current fiscal year. However, a distribution and investment income reduced the city's total liability premium to $164,160.

"The pool has money invested, and so when we have investment income and then deferred redistribution monies, those come back and what the city does is offset against our general liability premium," Magdich said.

According to Magdich, the city is also self-insured for $500,000 in general liability while the pool is insured for $5 million. In addition, the city has reinsurance which brings the city to a total of $40 million in general liability coverage.

According to City Manager Steve Schwabauer, general liability insurance covers almost anything the city would be liable for to a third party. However, it doesn't cover environmental hazards, but covers things such as car accidents, trip and falls and police shootings.

The city's property insurance premium was $123,785 for the current fiscal year. With the property coverage the city has a $25,000 deductible with a $400 million coverage limit. Property insurance covers all of the property the city owns, such as boilers, machinery and fiber optic equipment, Magdich said.

"It covers damage to city-owned property, so if a car drives into a substation and destroys it, and the driver is uninsured, we would have coverage to replace that multi-million dollar asset through property insurance," Schwabauer said.

The city's auto physical damage premium was $42,336 for the current fiscal year. With the auto physical damage coverage, the city has a $10,000 deductible and a $10 million coverage limit. The auto physical damage insurance covers all city-owned vehicles.

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