WSDOT official says self‑insurance for SR 520 has saved about $20 million

Mike, a WSDOT risk‑management official, told state employees that the agency moved the SR 520 floating bridge from a commercial insurance program to a self‑insurance approach after an actuarial study and internal work to identify exposures.

He described the prior arrangement as one in which bondholders required an insured revenue stream for tolled bridges, which historically led WSDOT to buy large commercial policies. "We bought about ... $400,000,000 worth of physical damage coverage for the 520 Bridge," he said, explaining the purchase was necessary at the time to obtain business‑interruption protection for tolled revenue. After an actuarial analysis and a legislative appropriation to pay for the study, the agency set aside roughly one year of premium — about $10,000,000 — and purchased a small earthquake policy to replicate the protection previously provided by the commercial package.

"So we're we're 20,000,000, basically, dollars to the good," Mike said, describing net savings the agency has realized in the two years since dropping the commercial policy. He said the set‑aside is being maintained to cover future losses and that the approach is planned to continue through about 2050 under current assumptions.

The official credited the project team, actuaries, and legislative funding for enabling the switch. He said the self‑insurance strategy is now being applied to other tolled assets, including the Tacoma Narrows bridge and an interstate bridge between Portland and Vancouver, where WSDOT may forgo seeking a commercial quote.