Cochise County risk-management staff warn insurance premiums likely to rise after property reappraisal

Cochise County risk management staff told the Board of Supervisors in a work session that the county's annual insurance premium is expected to increase from about $709,078 last year to roughly $806,780 next year, largely because the pool performed an in-person appraisal of county property and found higher replacement values than prior estimates.

The board heard the change matters because the county buys liability, property and professional liability coverage through a counties insurance pool; higher property values and recent claims histories drive the premium. Risk management also flagged the county's $350,000 judgment and damages line, which covers settlements, deductibles and other general-fund losses.

Julie Morales, a risk-management representative who reviewed the line items, told the board the judgment and damages account covers the county's deductibles and settlements. "It does include our deductibles," Morales said. Morales also described the county's process for deciding whether to handle a claim internally or tender it to the pool: routine small property or vehicle claims are often handled locally while complex injury or wrongful-death cases are usually referred to the pool.

Board members pressed staff about how the county decides whether to file a claim that would affect premiums. Morales said the decision depends on case complexity and departmental input; there is no single written dollar threshold that automatically sends a claim to the pool. For vehicle claims under the county deductible, fleet and risk staff typically handle repairs without engaging the pool.

Supervisors also raised concerns about the limits of the county's coverage for claims that arise from elected officials' actions. Supervisor Crosby asked why the county could not obtain coverage for certain legal exposures and said he did not understand "why the county can't get insurance for that." Other supervisors discussed the difference between individual legal insurance and pooled public-entity coverage and noted that the pool provides additional services, such as risk-mitigation consulting and county-wide programs the county might not afford on its own.

Staff told the board that the increase stems in part from the pool's recent in-person appraisals of county buildings and facilities, which showed property values higher than the pool's prior 5% annual estimate. Morales said that, despite the tentative premium rise, the county's budgeted amount still covers more than the projected increase.

The board asked for a briefing from the insurance pool's executive director; staff said an executive from the pool will provide a more detailed briefing on the services the pool offers and how the county's premium is calculated. Morales also said staff would distribute a summary page about the pool to participants.

Next steps: staff will schedule the pool briefing and return with more detailed premium and claims projections before the next budget decisions.