County will pay more for auto insurance
As of July 1, Dakota County will have a new commercial automobile insurance company: Travelers Insurance.
The current insurance carrier, One Beacon Insurance, already had already notice of non-renewal prior to expiration of the current policy. The nonrenewal was based on an unfavorable loss history and a lack of supporting lines of insurance (crime or property).
Dakota County will pay Travelers Insurance a yearly premium of $169,098, a 4.6 percent increase compared to the last policy year. The coverage is for 306 vehicles.
The county has experienced significant adverse liability losses over the last several years. It incurred losses of $75,901 during the last policy period and $184,519 for losses in the previous year. The losses for 2008-2009 are primarily from one liability and one physical damage claim in transportation maintenance. The 2009-2010 losses primarily resulted from a series of liability claims involving fence damage during the 2009 Christmas snowstorm. This loss history is having a negative effect on the price of future coverage. The insurance carriers incurred losses for the last two years equals 85 percent of the insurance premiums paid by Dakota County.
One Beacon Insurance went through several corporate changes this year and sold most of its business to Hanover Insurance, but retained several areas. A new underwriter for the company reviewed Dakota County's policy and viewed it as unfavorable.
The county's risk management division worked with A.J. Gallagher, the county's insurance broker, to market the auto insurance coverage. Eight carriers were contacted, with six declining to quote, one offering a rate significantly higher than the current one and the Traveler's Insurance providing the quote.
When the county's risk management department contacted the State of Minnesota's risk management division, it received a quote of $237,742. Based on the current marketplace and the county's recently losses, risk management recommended placement of the commercial automobile insurance coverage with Travelers Insurance.
The Travelers Insurance proposal provides liability coverage to a per-claim limit of $500,000 and a per-accident limit of $1.5 million, consistent with the county's liability limits under Minnesota law. Physical damage coverage remains at a $5,000 deductible for comprehensive and collision.
Rick management has also taken action to investigate and work with the departments that have generated the adverse claim experiences over the past two years. Ongoing loss prevention activities involve direct discussion with county staff, targeted training and education, and remedial action, where appropriate.