County insurance renewal discussion highlights $3M equipment underinsurance risk

In a recent meeting of the Wright County Board of Supervisors, discussions centered around the renewal of the county's insurance policy with the Iowa Communities Assurance Pool (ICAP). The meeting highlighted significant concerns regarding the valuation of county equipment and buildings, revealing potential underinsurance that could expose the county to financial risks.

Jay, a key participant in the discussion, noted that a review of the county's equipment list indicated inflated valuations for recent purchases, particularly road graders, which are currently insured for $245,000 despite new costs nearing $475,000. This discrepancy raised alarms about the county's overall insurance coverage, with estimates suggesting an underinsured value of approximately $3 million across various equipment.

The board faced a critical decision: whether to maintain the current replacement cost coverage or switch to an actual cash value policy, which would lower premiums but increase the county's risk exposure. The potential financial implications were significant, with estimates indicating an additional $6,000 in insurance costs if equipment values were increased to reflect current market rates. Furthermore, discussions included the need to raise insurance limits for the county jail and courthouse, with projected increases of $10,000 and $24,000, respectively.

The board also explored the administrative burden of breaking down insurance costs by department versus a consolidated approach. While some members argued for a simplified process to save time, others emphasized the importance of detailed scrutiny to ensure adequate coverage.

Looking ahead, the board plans to revisit these discussions in the coming weeks as they await further information from ICAP regarding premium adjustments and deductible options. The goal is to finalize decisions that will not only protect county assets but also align with budgetary constraints, particularly as the fiscal year approaches.

Overall, the meeting underscored the importance of proactive risk management in county operations, as officials navigate the complexities of insurance coverage amidst rising costs and potential liabilities.