HISID looks at higher property insurance deductible, new fire department command vehicle

Tuesday, May 22, 2012

HOLIDAY ISLAND -- Despite its high loss ratio the last few years, the Holiday Island Board of Commissioners learned Monday the best option for renewing its property liability insurance premium is not that bad.

Bill Birch of Bankcorp South Insurance Services, which has been under contract with Holiday Island since 2007 for property and management liability coverage, told commissioners Monday that no other companies came back with an offer to cover the suburban improvement district.

He said a lot of companies, after having to pay out on weather events in Oklahoma, Northwest Arkansas and the Joplin, Mo., tornado, are leery of covering large clients like public entities.

"FM Global had 148-percent combined losses last year," Birch said. "Companies are charging larger wind and hail deductibles. Many are going with either 3 percent or a flat $100,000."

He said Great American, which covers HISID, is not going to impose that now, even though the district's loss ratio is 86 percent from 2007 to present.

The district has paid $189,000 in premiums, and Great American has paid $162,000 in losses.

Those losses are damage to the well pumps, wind damage at the Recreation Center and the fire station roof.

Commissioners also found out the $5,000 deductible they thought the district enjoyed is actually $25,000.

"We made an error on the policy," Birch said. "It was issued at $25,000 deductible by the carrier, but we paid out your losses, less $5,000, because we made the mistake."

Great American is offering two premium options. Option 1 has $10,000 deductibles on buildings, business personal property and electronic data processing but a higher premium, of $56,000, as opposed to the $44,000 the district is paying now. Option 2 keeps the higher deductible of $25,000 across the board and the $44,000 premium.

Birch recommended the district utilize the lower deductible option "because you've had losses."

Roads Superintendent Kenny DeHart agreed.

"It cost $35,000 to $38,000 last time lightning hit the (well) pump, so at $25,000, you're paying well over the half (the cost)," he said. "....In my opinion, $25,000 is not a favorable deductible."

District Manager John Kennedy said the budget is $42,000 for the insurance premium. "If we go with the higher premium, we have to look at the budget as to where we can get the funds, but the budget is tight."

Commissioners agreed to go with the higher deductible and stay at the $44,000 premium.

In other business, the board:

* Heard Fire Chief Jack Deaton say the fire department auxiliary has agreed to fund a new command vehicle at a cost of $27,000, with no money coming from the district budget. The only cost may be a slight increase in insurance, offset by selling an older vehicle. The new vehicle is a Dodge 250 series three-quarter ton, four-door, four-wheel drive truck that would be purchased from the state equipment procurement list. Included in the cost is installation of a light bar, topper, slide-out tray and radio. Deaton said his truck goes to every emergency and fire call, and if he can haul more equipment, it can help get the district a better ISO rating.

* Heard Kennedy say the district will not have to supply electricity to Total High Speed Internet to place an antenna on the district's water towers. They will pay the district $200 per month in rent. This will not provide internet service to district residents; the antenna is a relay in their service to other area customers.

* Heard Kennedy say the district has a contract with Eureka Springs Hospital to provide random drug testing of full-time employees every two the three months.

The district will hold its business/voting meeting on Tuesday, May 29, at 3 p.m. due to the holiday.

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  • The 'big' determining factors of lower ISO rating is: Response time, # of trained personel, fire loss in $ amount, water supply, number and type of equipment (pumpers/tankers), consequently the type/value of a Fire Chief's vehicle is minute in computating the ISO.

    -- Posted by CommonSense22 on Sun, May 27, 2012, at 10:02 PM
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