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NCFPD expects $190,000 of annual savings from insurance carrier switch

Joe Naiman

Village News Reporter

The North County Fire Protection District expects to save approximately $190,000 annually from the May 24 NCFPD board vote to switch insurance carriers from the Special District Risk Management Authority to the Emergency Services Insurance Program.

The change in insurance carriers was approved on a 4-0 board vote with David Kennedy absent. The fire district had been using SDRMA for insurance since the late 1980s, but that is a pooled insurance carrier with nearly 500 public agencies, so losses by other pool members have resulted in an increase of more than $200,000 in annual premiums for NCFPD over the last five years. NCFPD premiums increased from $126,000 for fiscal year 2018-19 to $167,000 for 2019-20 to $243,000 for 2020-21 to $325,000 for 2021-22.

In 2020-21, only 19 fire agencies were in the SDRMA pool, which equates to approximately 3.5 percent of the total number of agencies which also include flood control districts, joint powers authorities, pest control districts, resource conservation districts, and water and sanitary districts.

NCFPD began researching other property and liability insurance carriers. Risk Strategies, which is an insurance broker, found three alternative carriers at no cost to the fire district. Risk Strategies also recommended ESIP, which will cover the district as an individual entity rather than as a member of the pooled plan.

Although the premium savings will be approximately $200,000 by switching from SDRMA to ESIP, the SDRMA rates include the North Zone Vector Solutions training program. The fire district will incur the full cost of that program, which is approximately $10,000 annually, by switching to ESIP. NCFPD will pay ESIP a $128,313 premium for fiscal year 2022-23.

The SDRMA policy also has a pool limit for replacement or other repair costs. The cybersecurity breach pool limit is $2,000,000 with $750,000 occurrence limits, while the ESIP limit is $1,000,000 per event and $10 million aggregate. The SDRMA cybersecurity insurance has a $50,000 deductible while the ESIP policy has no deductible. Neither agency has a deductible for computer and electronic devices, but ESIP will pay up to $250,000 for each event while the SDRMA limit is $75,000 per member.

ESIP also has no deductible for boiler and machinery equipment breakdowns or pollution clean-up and a lower deductible for flood damage. ESIP has a $1,000 deductible for earthquake insurance, and the SDRMA policy does not have that coverage. The estimated total replacement cost of NCFPD assets is $13,994,135. ESIP has no deductibles for liability insurance and will pay up to $5,000,000 per occurrence and up to $14,000,000 total during the policy term. The NCFPD insurance policy also includes vehicle and mobile or contractors equipment coverage.


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