The Topeka, Kansas, city manager has decided not to renew the city fleet's insurance coverage. City Attorney Amanda Stanley told The Topeka Capital-Journal that the fleet will instead become self-insured.
Kansas state law allows cities and counties to be self-insured.
Savings Expected
The change is anticipated to save the city $250,000 a year. The Capital-Journal reported that the city government has alternated over the years between carrying vehicle insurance and being self-insured.
Stanley said that under the city's vehicle policy, its self-insured retention -- otherwise known as a deductible -- was $500,000. Past claims revealed the city was already paying for the cost of settled vehicle claims without insurance kicking in, since the settlement values were below the self-insured retention level.
The city was also paying insurance premiums, and paying for a third-party administrator to process vehicle claims.
City officials came to the $250,000 savings when calculating these factors.
Officials had to bring the issue to the city council, because becoming self-insured required amended ordinance on vehicle claims. The amendment will arrange for vehicle claims against the city to be dealt with by the city attorney's office, instead of its risk management office like it previously required, according to the documents provided to the council.
The council approved the ordinance change at its January 10 meeting.
