SUBJECT
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Approve property insurance renewal with Arthur J. Gallagher, effective April 1, 2023 through March 31, 2024. ($2,300,850 estimated annual expense)
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DESCRIPTION
Polk County's annual property insurance coverage will expire on March 31, 2023. The property insurance covers just over one billion dollars in building values for the Board of County Commissioners and all Constitutional Offices. The expiring annual property policy has a loss limit of $100 million per occurrence, with a $60 million named windstorm loss sub-limit per occurrence. The expiring property premium was $2,153,279.
As is done every year, the county's insurance broker, Arthur J Gallagher and Co. has aggressively marketed the insurance program to 45 worldwide insurance companies to obtain the best coverage in return for the most favorable premium available.
Over the last four years, Polk County has effectively mitigated a continued difficult insurance market and premium increases by increasing deductibles and gradually decreasing limits. This renewal, however, has proven to be a much more difficult insurance renewal than in years past, with a much greater premium increase to duplicate the expiring coverage. The renewal quote to duplicate the expiring coverage is $3,565,818, or a 66% increase.
The extreme increase is due to a number of unprecedented influences affecting the insurance market including global supply chain disruptions, inflationary trends, continued rise in storm frequency and severity, elevated costs for materials and labor and a looming threat of global recession. The Florida residential homeowners' market is experiencing similar conditions and extreme premium increases as well.
In a continued effort to mitigate costly premium increases for the County, Risk Management again instructed the broker to present options for consideration. The most viable option is to significantly reduce the loss limit as well as the named windstorm sub-limit.
Risk Management...
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