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Freeport council approves lower-premium windstorm policy, seeks broader options
Summary
City Council approved a renewal of windstorm coverage for three municipal properties at a 3% deductible to lower the premium, while staff was asked to seek other brokers and report back on regional practices and outstanding FEMA recovery work.
The Freeport City Council voted unanimously May 19 to renew a supplemental windstorm insurance policy for three municipal facilities at a 3% deductible, lowering the city’s immediate premium obligation while staff pursues additional market options.
The item covered renewal quotes from ICAT delivered through broker Victor Insurance Managers. Staff reported the 1%-deductible premium last year would have been $72,040.55; the 3%-deductible premium approved by the council is $44,635.94 and a 5% deductible would have cost $28,608.75.
The council heard from Miss Hurst, who presented the coverage options and recommended the 3% deductible to help preserve the city’s long-term financial sustainability. “The cost of the coverage increased by approximately $14,000 at the current deductible we had of 1% to a total premium of $72,040.55,” Hurst said during the presentation. She cautioned that some carriers are narrowing the properties they will insure and that the city may face greater difficulty obtaining coverage in future years.
Council members pressed staff for context on recent claims and on options from other brokers. Councilman Matamoras asked whether the ICAT policy had been the city’s provider in the prior year and whether other brokers had been solicited. Hurst said ICAT was the current carrier, Victor is the broker, and she planned to meet with another broker (McGriff) in June to evaluate options and the possibility of bundling policies.
Council members also discussed the city’s recent storm-related expenditures and FEMA recovery status. Hurst said the city is working biweekly with FEMA and that site inspection work is ongoing; she noted that the city has submitted projects to FEMA for final approval and that the process is lengthy. A council member said barrel (hurricane) damage has cost the city “a little over $2,000,000” to date.
Several council members said they preferred the 3% option as an interim step while staff seeks alternatives; one council member urged staff to solicit more options so the city can switch policies if a better market solution is found. The council’s motion to approve the 3% deductible was made by Councilman Matamoras, seconded by Councilman Davis, and carried unanimously.
City staff said a newly sourced policy could be adopted later if a better option is found and that a bound policy can be canceled and prorated if replaced. Council members asked staff to report back on what neighboring municipalities (Clute, Lake Jackson, Surfside Beach) are doing and to return with any better quotes or broker recommendations.
Background: the supplemental policy covered three city locations that remained on the ICAT program after other properties were dropped; staff reported difficulty locating 12-year-old invoices the carrier requested for claims review and that municipalities are generally required to retain records for five years.
