Tacoma staff tells committee insurance premiums have risen fivefold since 2018; city projects higher costs ahead

At a Oct. 21 Government Performance and Finance Committee meeting, Luis Bengoso, business manager for the City of Tacoma, gave a high-level briefing on the city’s insurance program and said municipal premiums have climbed sharply in recent years.

Bengoso told the committee that "from 2023 to 02/2025, the city purchased 18 different policies" and that "the cost of property and casualty coverage has increased significantly for the last 7 years." He said the latest renewals show premiums for general government property coverage of about $2,600,000 and a separate liability premium of about $5,100,000, and displayed a historical chart showing city-wide insurance costs rising from roughly $1.7 million in 2018 to several million in the most recent renewal cycles.

Why it matters: Committee members said the trend affects the city budget, capital planning and risk strategy. Bengoso said the city carries a large self-insured retention for many lines and relies on a mix of commercial insurance layers, broker marketing and risk-pool participation to assemble coverage.

Bengoso attributed the market pressure to a combination of reduced insurer capacity, climate-driven disaster losses and litigation trends. He said the market has contracted — "over the last 10 years we had 27 markets that were willing to write public entities; it is down to about 17, but out of those 17, only 10 actually do write public entities" — and warned that fewer carriers means higher premiums and more layers of coverage.

He gave specifics the committee discussed: the city carries a $500,000,000 coverage limit for property with a $150,000 self-insured retention; flood and earthquake have supplemental limits (Bengoso referenced a $50,000,000 supplement for flooding and a $10,000,000 supplement for earthquake, with a 5% or $250,000 minimum deductible for earthquake). He also projected future cost scenarios, saying the city has seen an average annual increase near 26.7% for 2019–2025 and that, "assuming an annual 15% rate increase, we can expect to pay over $10,000,000 next year for property and casualty coverage."

Committee members asked for comparisons with other Washington cities and for more detail about risk pools. Bengoso said large cities such as Seattle and Tacoma typically self-insure many risks, while smaller cities often participate in municipal risk pools; he reported one state risk pool has about 160 members. Committee members also raised tort-reform and joint-and-several liability as statewide issues that affect municipal premiums; Bengoso described Washington’s rule that plaintiffs can pursue full recovery from a single defendant and called the expansion of municipal liability "a factor" in rising costs.

Bengoso said his division also pursues recoveries from third parties and reported that, from 2018 through Sept. 30, 2025, the city recovered over $2,700,000 in damages, an annual average of about $337,000. He characterized the recoveries as roughly 40 percent of recoverable loss in those cases.

Committee members pressed on specific coverage gaps, noting that a $10,000,000 earthquake supplement would likely be insufficient if multiple major facilities were damaged by a single event. Bengoso acknowledged higher limits are available but would substantially increase premiums.

No committee action was required on the briefing. Bengoso closed by noting staff will continue to explore program options and that, in the next budget cycle, the city should anticipate materially higher insurance costs as part of planning: he referenced a planning figure mentioned in the presentation for a future cycle (presented as approximately $21,000,000).