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City staff warned of steep municipal insurance increases, levy-certification risk for flood coverage
Summary
City risk manager and outside brokers told commissioners the city faces an insurer-driven renewal that could raise premiums roughly 25%, sharply boost deductibles — and temporarily exclude coverage for levee-related claims until levee inspections are recertified.
City risk management staff and outside brokers told the Salina City Commission at a study session that the city’s property and casualty insurance renewal this summer is likely to be markedly more expensive and carry much higher deductibles.
Nancy Schussler, the city’s risk manager, said Travelers — the city’s current insurer for many lines — has signaled an expected 25% price increase and changes to deductible structure for the renewal that takes effect at the end of June. Mark Skidmore, president of Iron Insurance Partners, and Bob Charlesworth of Charlesworth Consulting briefed the commission on the state of the marketplace and what the changes would mean for the city.
The report to the commission said a number of national trends are pushing increases: a rise in the frequency and cost of billion‑dollar weather events, higher construction costs from inflation, and growing litigation and so‑called “nuclear verdicts” that are driving casualty (liability and auto) pricing across the market. Charlesworth and Skidmore argued that those market‑wide pressures, combined with the city’s recent loss experience, explain Travelers’ renewal position.
Travelers told staff it may exclude coverage tied to levee failures if the city cannot produce current, certified levee inspection reports. Schussler said public works has engaged a third party to inspect about 20–25 levee segments and that Travelers will restore coverage once the insurer receives the certified reports. The commission was told the city’s levy work previously was done in-house but was delayed when inspection equipment failed.
On vehicle coverage, staff said auto physical‑damage exposure has pushed some deductibles up sharply. Schussler said the city’s current “catastrophic” fleet deductible — the level at which the city’s capped exposure applies — could be increased from about $75,000 to $750,000 for auto physical damage under Travelers’ renewal terms. The city reported nearly $900,000 in auto claims in 2023 and said two recent hail events damaged dozens of city vehicles (89 vehicles in one 2024 storm; 39 in the most recent storm reported during the session).
Schussler and Charlesworth outlined options staff and brokers plan to pursue: market submissions to other insurers, a property‑only pooling concept, and reworking deductibles. They also recommended revisiting a risk‑management reserve or “self‑insurance” approach to help absorb higher deductibles (Charlesworth noted the city has considered and previously used a health‑benefit reserve model as precedent).
Commissioners asked about the city’s budget treatment of deductibles and reserves. Schussler said claims and deductibles are paid from a line item in the general fund and enterprise funds when equipment is involved, but that the line item has not been sufficient in large years. Staff and consultants urged considering a dedicated reserve that could be used to cover larger, infrequent losses and allow the city to take higher deductibles in exchange for lower premiums.
No formal action was taken at the study session; staff said they will return with firm renewal figures in late June and present alternatives the city can consider before the policy effective date.
Ending: The city’s insurance renewal remains in negotiation. Staff will pursue alternative markets and present options to the commission once final proposals are in hand; in the meantime public‑works inspections to recertify levees are underway so the city can seek to avoid an exclusion for levee‑related liability.
