FRANKFORT, KY – Kentucky’s Governor Steve Beshear announced the Commonwealth has begun self-insuring state-owned vehicles. The State expects to save taxpayers approximately $750,000 each year.
The Kentucky Self-Insured Auto Program (KSAP) is a cost-saving action the Governor implemented as part of his ongoing Smart Government Initiative (SGI), which examines State government operations to extend and expand efficiency efforts to save money and state resources.
“By insuring our vehicles in-house, we are able to protect and cover our employees and state property at a significant savings to taxpayers,” Gov. Beshear said. “The implementation of this plan is another successful effort resulting from SGI during this time of financial strain. We will continue to implement innovative measures, such as self insurance, to improve the operation of government and provide lasting improvements for years to come.”
KSAP, which took effect Oct. 1, covers approximately 12,500 vehicles and pieces of equipment. In addition to state passenger vehicles, all utility trailers, heavy truck tractors, semi-truck trailers, and other mobile equipment will be self-insured by the Commonwealth.
The large group of insured entities includes vehicles managed by the Finance and Administration Cabinet’s Division of Fleet Management, Transportation Cabinet, Kentucky State Police, Department of Agriculture, Public Protection Cabinet, and Energy and Environment Cabinet. The Governor’s office said many other quasi-government agencies are also covered by KSAP, such as the Kentucky Lottery and the Kentucky Higher Education Assistance Authority.
KSAP is managed by the Division of State Risk and Insurance Services in the Finance and Administration Cabinet. The Commonwealth is currently self-insured for fire and tornado coverage, health insurance, and workers’ compensation insurance for public employees.
“The concept of self-insurance was already in place and made for a smooth transition for vehicles,” said Lori Flanery, secretary of the Finance and Administration Cabinet. “We will still be able to offer the same effective coverage while saving valuable tax dollars. The Division of State Risk and Insurance Services, with the regulatory assistance of the Kentucky Department of Insurance, were integral in making this transition a reality, and I commend their hard work.”
The Commonwealth had previously insured its vehicles through private insurers. The estimated savings for self-insurance is based upon historical accident reporting and claims compared to premiums paid in the past, Flanery said.