Insurance Audit: Century $4 Million Short In Coverage

June 3, 2009

The Town of Century has discovered that some of the town’s property is not insured against hurricanes and other losses, and that some property is grossly underinsured.

Insurance agent Wayne Hood of Underwood Anderson & Associates has informed the town that their sewage treatment plant is not insured, and that it never has been. But he said that really was not a concern.

“You are insuring water,” Hood told the council, referring to the fact that the sewage plant is always underwater, immune from fires, floods and hurricanes. Insuring the plant would provide some coverage for pipes, pumps and other equipment, but would otherwise be nearly worthless, he said.

The discovery was part of a free insurance audit and appraisal conducted by an independent appraiser on behalf of the town’s insurance carrier, the Preferred Government Insurance Trust. The company pools the insurance resources of about 700 Florida governmental agencies.

The audit found that while Century has about $6 million of property insured, the actual value of Century’s property is $10 million. The biggest discrepancies were the sewage treatment plant and two water towers insured for $200,000 each when the appraiser said they were worth $700,000 each.

PIGT provided the town with the option of increasing coverage between now and October 1, the policy renewal date, for $4,000. The increase would have upped the current coverage to 125% replacement cost as an added bonus. But the the company recommended, Hood said, that Century increase the coverage as desired at the time of the policy renewal.

“I am in favor of waiting until October first since we haven’t budgeted this amount” Council President Ann Brooks said. The council has agreed, opting to wait until their new fiscal year on October 1 to increase coverages.

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Written by William Reynolds · Filed Under News