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Fergus Falls council raises property liability deductibles and approves reserve policy to offset higher self-insurance
Summary
Council voted to raise property and liability deductibles from $10,000/$20,000 to $25,000/$50,000, estimating roughly 12–14% premium savings, and adopted a policy to retain a reserve (100,000 or 200% of deductible) to cover higher self-insured exposures; staff will review property schedules for possible removals from coverage.
The Fergus Falls City Council voted Dec. 10 to increase the city’s property and liability deductibles and to adopt a reserve policy to help cover the higher self-insured amounts.
Bill (city staff) explained the recommendation to change the per-occurrence deductible from $10,000 to $25,000 and the aggregate from $20,000 to $50,000, citing guidance from the League of Minnesota Cities. He estimated the change would reduce property and liability premiums by roughly 12–14% and said the city currently holds about $229,000 in dividend reserve funds that could be used to backstop higher self-insured exposure.
Council member Bob moved to approve the higher deductible; the motion passed by voice vote. The council then approved a policy to maintain a reserve balance equal to $100,000 or 200% of the deductible per year to cover expected exposure. Staff indicated that after the motion they would work with council members (Bill and Mark) to identify lower-value items that could be removed from insurance schedules (for example, small standalone items under a threshold) and to pull six years of claims data to inform the list.
Council members raised questions about whether lower premiums might reduce dividend distributions, whether the city will hit aggregate deductibles regularly, and how maintenance deductibles ($1,000 per claim after aggregate) would affect submission decisions. Staff committed to returning with a recommended schedule of items proposed for removal, claims-history data, and to check League timelines for renewal and possible schedule adjustments.
