Boulder City dodges insurance inflation

Insurance is one of those things that are super important but that most people are not going to discuss over a beer like it was a football game. Which is a nice way of saying that the subject can be a little… dry.

But still important. And the headline news is that for the upcoming fiscal year, while prices for everything seem to be going up on an almost daily basis, the increase in costs for the city’s insurance is so small as to be pretty much negligible. Which bucks the trend statewide.

The city is not self-insured, as many assume. In 1996 Boulder City joined Nevada Pool Pact, who provides “brokerage-like” services to 120 different small government organizations. It works something like a cooperative. Pool Pact has several insurance companies and claims providers that work for its network and administer the daily insurance programs for its members.

Since 1996, the city has received its annual cyber, pollution, workers’ compensation, liability, property, crime, equipment, airport and casualty insurance through Pool Pact.

Every January, Pool Pact, through local agent Leavitt Insurance, solicits current employee and property information from the city, and uses this information to seek new premiums and policies for its members. In June of every year, the city gets the news in terms of cost for the coming year and the various insurance programs take effect on July 1st.

The biggest directly controllable cost issue is choosing between a low deductible of $10,000 per claim and a higher $25,000 deductible. In general, one way to save money on insurance is to go with the higher deductible, which would have actually cost the city more money had they chosen that road. In a note to the council, Finance Director Cynthia Sneed explained, “This year the city would have spent $268,654.33 in deductibles if we had a $25,000 deductible versus the $157,454.93 we actually spent with the $10,000 current deductible. This is a difference of $111,833.16. The savings for implementing a $25,000 deductible in the FY25 policy is $90,833.13. This means the city would have actually lost $20,366.24. This is the fourth year in a row where a $25,000 deductible would have incurred a loss for the city. Again, it is more fiscally responsible to maintain a $10,000 deductible.”

But that not-immediately obvious deductible decision is not the only news in terms of savings. The biggie is that the rate increase in Boulder City is only about 1% of the increase seen in some other places in Nevada. That is not a typo. One percent.

Or, looking at it from another angle, the rate of increase is somewhere between 95% and 99% lower than what is typical this year.

“The city views this year’s low premium as a success story,” said Paul Sikora, purchasing, grants and risk manager in the Boulder City Finance Department.

“This year in the municipal insurance industry, most organizations planned for and received increases to their premiums in the 6% - 10% range. Boulder City’s 0.12% rate can be attributed to our active and voluntary participation in the Pool Pact Enterprise Risk Management Excellence Program. This year-long evaluation of the city’s processes was to ensure we were reducing risk and implementing best practices throughout the organization, which ultimately led to us being a low-risk organization for insurance purposes, resulting in a lower premium. City staff also updated our vehicle, facilities and equipment listings and had a reduction in claims filed against us… all factors that helped us achieve the favorable premium rate this year.”