County insurance advisor urges review of property values, separate generator coverage

YANKTON — A county insurance representative, identified in the meeting as Lynn, told Yankton County commissioners the county’s recent property survey shows the county’s stated values are generally higher than the pool’s minimums and recommended the commission consider selective reductions, not blanket cuts, to reduce premium costs while protecting replacement-cost exposure.

Lynn said commissioners "can move your property values down to the minimum required," but cautioned that jumping all the way to minimums could reduce the county’s blanket replacement-cost limit and leave the county underinsured for a worst-case loss. "Your blanket limit is $42,700,000," Lynn said, and noted that lowering all locations to the pool minimum would reduce that blanket to about $34,000,000 — roughly an $8 million difference.

Lynn told commissioners they do not need to decide immediately and can ask the insurer for quotes showing the premium and exposure impact of several options. She recommended selective reductions for lower-priority structures while retaining higher values on critical buildings such as the public safety center, the highway shop and the county administration building. She said lowering the public safety center’s listed value from $26,000,000 to the pool minimum of about $20,000,000 would save about $9,700 on the most recent invoice; an intermediate reduction (for example, to $23,000,000) would yield a smaller savings.

Lynn explained the difference between full replacement-cost and stated-value coverage. With stated value, "you get replacement cost up to the limit associated with that property." With full replacement cost, replacement coverage can be provided up to the blanket limit once structures are rebuilt, she said.

On unscheduled locations, Lynn said the county had previously relied on miscellaneous unscheduled-locations coverage for items not listed on the schedule, but because the recent survey identified specific unlisted locations the county should decide whether to add them to the schedule. She said the pool can add identified locations midterm, but asked the county to be "intentional" about coverage decisions.

Generators: Lynn said the county currently does not have separate scheduled coverage for several generators listed in green on the spreadsheet. She recommended listing generators as separate locations rather than rolling them into the building value because generators typically receive lower (outdoor property) rates. She said the spreadsheet reflected an example $230,000 generator value and that scheduling it as a separate location would carry a modest fee (Lynn cited a $201 fee in the discussion) rather than leaving it excluded; if excluded, the pool would not cover damage to that generator.

Specific property questions: Lynn noted several line items that commissioners asked to reexamine, including a courthouse memorial that currently appears on the schedule at a trended replacement cost and a county extension office building listed at roughly $751,000, which she suggested the county re-evaluate. She offered to meet with county staff (Patty) and an underwriter to run live quotes showing how target changes would affect the county contribution and blanket limits.

The insurer did not ask for an immediate vote; commissioners directed staff to follow up and schedule the proposed review meetings with Patty and underwriting staff.

Lynn closed by offering additional information and calendars to coordinate follow-up meetings with the county.