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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> ERMU Commission Theresa Slominski—Finance and Office Manager <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> July 11, 2017 2.6 <br /> SUBJECT: <br /> Renewal Premium for LMCIT Property/Casual Insurance <br /> ACTION REQUESTED: <br /> Accept the 2017-2018 Property and Casualty Insurance renewal. <br /> BACKGROUND: Our annual renewal for Property and Casualty Insurance is effective 7/1/2017 <br /> through 7/1/2018. <br /> DISCUSSION: We have received our renewal premium from the LMCIT for the 2017-2018 <br /> year. The 2017-2018 premium is $115,122 with a$20,000 per occurrence/$40,000 annual <br /> aggregate deductible, except the Equipment Breakdown has a separate $20,000 per accident <br /> deductible. This is a reduction from the prior year of$2,310 or 2%. <br /> We have a reduction in premium this year due to a few different factors. <br /> • The property premium increased about 27%. Property rated decreased by 4%, <br /> however the protection class changed from (03)to (05). <br /> • Our experience modification factor increased slightly from .863 to .876. Our <br /> aggregate factor also increased slightly from 1.010 to 1.014. <br /> • The mobile property premium has decreased substantially. This is due to the <br /> change in items that are scheduled&how"unscheduled mobile property" is now <br /> priced. The premium is based on a percentage of the property premium and not a <br /> flat charge as in prior years. <br /> • The municipal liability premium increased about 8%. There are a few factors that <br /> contributed to this: 1)the increase in the experience modification factor and <br /> aggregate factor, 2)the increase in expenditure rates of 5%. <br /> • The auto liability premium increased about 10%. The automobile liability rates <br /> have remained flat, however there are additional vehicles, as well as the increase <br /> in the experience modification factor and the aggregate factor. <br /> I have attached the Renewal Premium Summary for your review, which lists the various <br /> coverages and related premiums. No changes are suggested and so this is informational only. <br /> FINANCIAL IMPACT: A 2%reduction in premium from the prior year, totaling $2,310. <br /> ATTACHMENTS: <br /> • 2017-2018 Renewal Premium Summary <br /> Page 1 of 1 <br /> 158 <br />