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District insurance skyrockets
The Douglas County School District experienced an 85 percent increase in its property and casualty insurance premiums this year, a school district publication said.
By By: News-Press staff
The Douglas County School District experienced an 85 percent increase in its property and casualty insurance premiums this year, a school district publication said.
The district bid out to 21 different markets, and the best deal it could get was a bill of $631,644, compared with the 2001 bill of $342,275, said Bruce Caughey, district spokesman.
"Part of that increase was because of growth," Caughey said. "But most of it was because of market influences."
Those market influences included an increase in the number of large claims filed against insurance companies, including those from the Sept. 11 terrorist attacks in New York City, and a number of losses in interest earnings, he said.
The sour economy also is to blame, Caughey said.
Since 1999, investment income has declined and the insurance market has tightened significantly, the district said. Catastrophic losses - including Sept. 11 - have caused significant pricing increases.
About 20 percent of the district's premium increases was attributable to growth, said Brennan Mendus, acting risk manager for the district. Sixty-five percent of the increase was because of the economy.
School districts throughout the state are experiencing the same dilemma, Caughey said.
"Some of them are facing higher premiums than we are," he said.
The cost of the Douglas County School District's increase will be paid from reserve funds.
Although the district's premiums have increased, some local governments have not felt the same pinch.
Castle Rock is paying $285,000 this year for property and casualty insurance, up from $250,000 last year, said Jeff Hansen, finance director.
Parker's property and casualty insurance increased about 10 to 12 percent this year from $108,202 last year mostly because of growth and general liability loses, risk manager Steve Bedard said.
The insurance market has been in a downward turn long before the events of Sept. 11, but because many companies are using the terrorist attacks as an excuse to raise prices Bedard anticipated an increase in rates.
"Across the board all property and casual insurance rates have increased," he said. "What I saw was not unexpected."
A large part of the increase in Parker's rates is due to other factors besides general rate hikes. Bedard credits town officials with finding reasonable insurance rates for Parker.
The town has been with the same insurance provider for the last few years and has a "very good insurance broker who does a good job keeping rates down," he said.
In November, town officials began looking at the rates and the quality of service provided by different insurance companies. Rates for 2002 were secured around Christmas time, Bedard said.
The risk manager for Douglas County, Sherry Monroe, bid out insurance rates immediately after the events of Sept. 11, said Kristin French, Douglas County public information officer. In doing so, rate increases were not as high as they could have been, French said.
"Insurance rates increase every year. We're pleased with what our risk manager negotiated for the county immediately after Sept. 11," French said.
Liability insurance premiums went up 21 percent for the county. Every year county revenues increase, additional employees are hired and other costs increase as Douglas County grows. Insurance providers factor in such growth.
Worker's compensation insurance rates went up 49 percent. Original bids submitted would have increased rates between 73 percent and 136 percent, but the county negotiated rates down, French said.
Douglas County government's property insurance rates increased 63 percent. The highest bid reached an 87 percent increase, but the county again negotiated with insurance providers.
Douglas County government will pay a 36 percent increase in rates for insurance for road and bridge equipment and auto physical damage, French said.
The district bid out to 21 different markets, and the best deal it could get was a bill of $631,644, compared with the 2001 bill of $342,275, said Bruce Caughey, district spokesman.
"Part of that increase was because of growth," Caughey said. "But most of it was because of market influences."
Those market influences included an increase in the number of large claims filed against insurance companies, including those from the Sept. 11 terrorist attacks in New York City, and a number of losses in interest earnings, he said.
The sour economy also is to blame, Caughey said.
Since 1999, investment income has declined and the insurance market has tightened significantly, the district said. Catastrophic losses - including Sept. 11 - have caused significant pricing increases.
About 20 percent of the district's premium increases was attributable to growth, said Brennan Mendus, acting risk manager for the district. Sixty-five percent of the increase was because of the economy.
School districts throughout the state are experiencing the same dilemma, Caughey said.
"Some of them are facing higher premiums than we are," he said.
The cost of the Douglas County School District's increase will be paid from reserve funds.
Although the district's premiums have increased, some local governments have not felt the same pinch.
Castle Rock is paying $285,000 this year for property and casualty insurance, up from $250,000 last year, said Jeff Hansen, finance director.
Parker's property and casualty insurance increased about 10 to 12 percent this year from $108,202 last year mostly because of growth and general liability loses, risk manager Steve Bedard said.
The insurance market has been in a downward turn long before the events of Sept. 11, but because many companies are using the terrorist attacks as an excuse to raise prices Bedard anticipated an increase in rates.
"Across the board all property and casual insurance rates have increased," he said. "What I saw was not unexpected."
A large part of the increase in Parker's rates is due to other factors besides general rate hikes. Bedard credits town officials with finding reasonable insurance rates for Parker.
The town has been with the same insurance provider for the last few years and has a "very good insurance broker who does a good job keeping rates down," he said.
In November, town officials began looking at the rates and the quality of service provided by different insurance companies. Rates for 2002 were secured around Christmas time, Bedard said.
The risk manager for Douglas County, Sherry Monroe, bid out insurance rates immediately after the events of Sept. 11, said Kristin French, Douglas County public information officer. In doing so, rate increases were not as high as they could have been, French said.
"Insurance rates increase every year. We're pleased with what our risk manager negotiated for the county immediately after Sept. 11," French said.
Liability insurance premiums went up 21 percent for the county. Every year county revenues increase, additional employees are hired and other costs increase as Douglas County grows. Insurance providers factor in such growth.
Worker's compensation insurance rates went up 49 percent. Original bids submitted would have increased rates between 73 percent and 136 percent, but the county negotiated rates down, French said.
Douglas County government's property insurance rates increased 63 percent. The highest bid reached an 87 percent increase, but the county again negotiated with insurance providers.
Douglas County government will pay a 36 percent increase in rates for insurance for road and bridge equipment and auto physical damage, French said.
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