Finance committee approves city insurance renewal; picks policy adding broader crime coverage

The Homewood City Finance Committee on Jan. 27 approved a one-year renewal of the city's insurance package and selected an option that replaces a sharply reduced crime limit previously proposed by Travelers with broader coverage from Hiscox.

Margaret Ann, the insurance presenter for Morgan & Pieburn at Cobbs Allen, told the committee Travelers had offered only $25,000 for crime coverage after a large claim last year. "Not surprisingly, Travelers decided with the large crime claim that Homewood had last year, this year, that they only wanted to offer $25,000 instead of $500,000," Margaret Ann said. The committee considered two market options and was advised the alternative policy provides broader coverage at a modest additional cost.

The committee discussed other changes in the package, including higher deductibles across several lines. The overall premium increase was reported at about 6.8 percent, driven largely by property insurance and across-the-board deductible increases. Committee members were told commercial auto and general liability deductibles increased from $10,000 to $25,000; law-enforcement and public-entity liability deductibles increased from $25,000 to $50,000; and a $100,000 flat wind/hail deductible was noted on the property schedule (page 12 of the materials).

Margaret Ann told the committee the policy being recommended for crime coverage is with Hiscox and that the alternatives include a $500,000 limit that more closely matches previous protection. "You have the option of a million ... or 7706, which is 500,000, which is what you currently had last year," she said, referring to premium choices in the packet. The presenter recommended returning to $500,000 rather than accepting Travelers' $25,000 limit.

Committee members also reviewed cyber, funds-transfer and other crime-related sublimits. Margaret Ann said the selected option restored coverage categories where the city previously had no coverage for funds-transfer and cyber deception claims. The committee confirmed they had consulted Brandon Sims on cyber coverage and that he felt comfortable with the limits.

Motion and vote: A motion to approve the insurance renewal with the recommended option (including the Hiscox crime coverage option rather than Travelers' reduced $25,000 limit) carried unanimously in committee. The committee recorded the vote as 4-0 in favor; the contract term begins Feb. 1.

Why it matters: The committee said the change balances rising market costs and the need to avoid leaving the city exposed on key crime and liability lines. Members discussed the administrative trade-offs of higher deductibles versus the risk of very large percentage deductibles tied to building values.

The city will bring the renewal forward to the full council as part of the consent/contract approvals for the next council meeting.