2.6 ERMUSR 07-11-2017 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Theresa Slominski—Finance and Office Manager
MEETING DATE: AGENDA ITEM NUMBER:
July 11, 2017 2.6
SUBJECT:
Renewal Premium for LMCIT Property/Casual Insurance
ACTION REQUESTED:
Accept the 2017-2018 Property and Casualty Insurance renewal.
BACKGROUND: Our annual renewal for Property and Casualty Insurance is effective 7/1/2017
through 7/1/2018.
DISCUSSION: We have received our renewal premium from the LMCIT for the 2017-2018
year. The 2017-2018 premium is $115,122 with a$20,000 per occurrence/$40,000 annual
aggregate deductible, except the Equipment Breakdown has a separate $20,000 per accident
deductible. This is a reduction from the prior year of$2,310 or 2%.
We have a reduction in premium this year due to a few different factors.
• The property premium increased about 27%. Property rated decreased by 4%,
however the protection class changed from (03)to (05).
• Our experience modification factor increased slightly from .863 to .876. Our
aggregate factor also increased slightly from 1.010 to 1.014.
• The mobile property premium has decreased substantially. This is due to the
change in items that are scheduled&how"unscheduled mobile property" is now
priced. The premium is based on a percentage of the property premium and not a
flat charge as in prior years.
• The municipal liability premium increased about 8%. There are a few factors that
contributed to this: 1)the increase in the experience modification factor and
aggregate factor, 2)the increase in expenditure rates of 5%.
• The auto liability premium increased about 10%. The automobile liability rates
have remained flat, however there are additional vehicles, as well as the increase
in the experience modification factor and the aggregate factor.
I have attached the Renewal Premium Summary for your review, which lists the various
coverages and related premiums. No changes are suggested and so this is informational only.
FINANCIAL IMPACT: A 2%reduction in premium from the prior year, totaling $2,310.
ATTACHMENTS:
• 2017-2018 Renewal Premium Summary
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LEAGUE OF CONNECTING&INNOVATING
MINNESOTA SINCE 1913
CITIES
July 6,2017
NCI-BIB LLC
Northern Capital Insurance Group Covered Party: Elk River Municipal Utilities
7825 Washington Avenue S.
Suite 600 Effective Date: 7/1/2017
P.O.Box 9396
Minneapolis,MN 55440-9396
RENEWAL PREMIUM SUMMARY
Common Coverages
Coverage Deductible Premium
• Property $ 20,000/40,000/1,000. $30,179.
• Mobile Property 20,000/40,000/1,000. 1,208.
• Municipal Liability 20,000/40,000/1,000. 21,110.
• Automobile Liability 20,000/40,000/1,000. 2,897.
• UM/UIM$200,000 all owned autos 20,000/40,000/1,000. Included.
• Basic Economic Loss Benefits(PIP)all owned autos 20,000/40,000/1,000. Included.
• Automobile Physical Damage 20,000/40,000/1,000. 4,096.
• Crime 20,000/40,000/1,000. Included.
• Petrofund NA. Included.
• Defense Cost Reimbursement NA. Included.
Experience Factor Modifier: 0.873 Aggregate Factor Modifier: L014
Expiring Experience Factor Modifier. 0.863
(Applied to Municipal Liability,Auto Liability,and UM/UIM)The modifier is calculated with a formula which compares the city's actual loss history with the amount of losses that would
be expected for a city of that size if the city were a perfectly average LMCIT member.If the city's losses and expenses are better than average the city receives a premium credit.If the
city's losses and expenses are worse than average,the city receives a premium debit.
Optional Coverages
Coverage Deductible Premium
• Bond $500,000. 20,000/40,000/1,000. 668.
• Equipment Breakdown 20,000. 54,964.
• Excess Liability Limit: $ NA. Not Covered.
• Liquor Liability Limit: $ NA. Not Covered.
• Fireworks Not Covered.
• No Fault Sewer Back Up Limit: $ Not Covered.
• Airport Liability Not Covered.
TOTAL: $115,122.
DO NOT PAY UNTIL YOU RECEIVE INVOICES
TORT LIMIT: $500,000/$1,500,000
LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE.WEST PHONE:(651)2814200 FAX(651)281-1298
INSURANCE TRUST it PAUL MN 55103-2044 TOLL FREE:(800)925-1122 WEB:WWW.LMCORG
Comments: If the expiring covenant includes additional interests(mortgagee,loss payee,additional insured)you will find a
schedule of those interests included with the Premium Breakdown. Please review,update and return to your LMCIT Underwriter.
Optional Coverage Quotes
Coverage Deductible Approximate Premium
Excess Liability Quote: Limit: $1,000,000 $7,597.
Optional coverage(s)are not bound unless the covered party has requested that coverage be bound and LMCIT has sent a
written confirmation.Optional coverage quotes are valid for 30 days after the date of this letter.
PREMSUMXM(11/11) 159