Item
|
Deputy Superintendent
Item |
| DATE: | Tuesday, April 28, 2020 |
| TO: | School Board Members |
| FROM: | Addison Davis, Acting Superintendent |
| SUBJECT / RECOMMENDATIONS | |
| <p>Approve the Purchase of Quoted Excess Property Insurance Program <em>(Operations Division)</em></p> | |
| EXECUTIVE SUMMARY | |
| <p style="text-align: justify;">Hillsborough County Public Schools purchases insurance coverage for its excess property for loss due to perils such as fire, flood, named windstorm, etc. The coverage renews May 1, 2020. Our current coverage limits have been set at $100,000,000 with no self-insured retention or margin clause. An excess property insurance history is captured in Attachment A. Our deductible for named windstorm-flood remains at 5%, with a minimum deductible of $250,000. The deductible for all other perils remains at $100,000. The renewal also includes auto physical damage coverage for our vehicles and buses. Our insured values have increased from May 1, 2019, from $5,691,492,827 to $6,039,900,812; an increase of 6%. </p> <p style="text-align: justify;"> The 12-month excess property insurance premium will be $7,990,000 (not inclusive of taxes and fees), which is a 5.04% rate decrease from the total expiring program for the 2019-2020 annual, renewal based on the increased total insured value (TIV) at the expiring rate (Attachment A). The recommended coverage is in the amount of $100,000,000 limits with the Probable Maximum Loss for a 100 year storm of $123,930,725. The Florida Office of Insurance Regulation will be petitioned for validation that this amount meets the requirements for reasonable insurance coverage of the Stafford Act. The reduction in limits is due to the recent hardening of the property market as well as recent loss history. The May 1, 2020, 12-month excess property quote is for $7,990,000 plus taxes and fee in the amount of $1,446.</p> <p style="text-align: justify;"> We are engaged in a contract with First Florida Insurance Brokers (FFIB) in which their commission is capped per our contract; they receive 6%, capped at $175,000. Industry standard commission on an excess property placement can range from 5-10% with no cap. The industry standard revenue on our renewal (at 6%), with no cap, would be $479,400. Given the contract in place with FFIB, this is a savings on this year’s renewal to the District of $304,400. In addition, our contract with FFIB states that the wholesaler’s commission will be 3.5%; industry standard on wholesale commission is 5-7.5%. This also generates a savings to the District this year between $119,850 and $319,600.</p> <p> </p> | |
| STRATEGIC OBJECTIVES | |
| <p>Establish a strong foundation of financial stewardship.</p> | |
| FINANCIAL IMPACT (Budgeted: No) | |
| EVALUATION | |
| SUBMITTED BY: Christopher Farkas, Deputy Superintendent, Operations, Christopher.farkas@hcps.net, 813-272-4004 | |
| Christopher Farkas | ||
| Deputy Superintendent, Operations (813) 272-4004 |
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| C 7.02 | ||
| Hillsborough County Public Schools (Florida) * Mtg.#20200428_987 (Board Meeting) * Section C Item# 7.02 | ||