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<br />Insurance Renewals <br />June 19, 2006 <br />Page 2 of 3 <br /> <br />The Public Entity Property Insurance Program (PEPIP) was established on <br />May 15, 1993 with seventeen public agencies that included the City of <br />Santa Ana. The purpose of PEPIP is to provide public agencies with group <br />purchasing strength in a challenging property insurance market. Since <br />1993, PEPIP has grown to include over 4,000 members in 35 states, which <br />has allowed the group to purchase adequate property insurance at <br />affordable premiums. Renewal of the City's participation in PEPIP will <br />ensure the City's ability to continue purchasing property insurance at <br />competitive rates. <br /> <br />The $387,188 premium will provide $500 million dollars or more of <br />coverage for most City properties. PEPIP will provide the City with $100 <br />million for boiler and machinery damage and $82.5 million in flood <br />damage. All PEPIP members share $110 million of terrorism coverage with <br />a $400 million annual aggregate. However, due to the excessive premium <br />cost of earthquake insurance, the City will not seek this coverage. <br /> <br />Current insurance deductibles are as follows: <br /> <br />Coverage <br /> <br />Deductible <br /> <br />Vehicles <br />Fire Fighting <br />Vehlcles <br />All other <br />All other occurrences <br />Boiler & Machinery <br /> <br />$50,000 <br /> <br />$25,000 <br />$10,000 <br />$2,500 to <br />the pieces <br /> <br />$375,000, depending <br />of equipment involved <br /> <br />on <br /> <br />Through BICEP, the City purchases excess workers' compensation and <br />liability coverage through the California Public Entity Insurance <br />Authority (CPEIA). The City joined the CPEIA Crime Bond Program in 2004, <br />and the current expiration date of this jointly purchased coverage is <br />July 1, 2007. The program's insurers offered to extend the coverage now <br />for another year to July 1, 2008 at attractive pricing, not to exceed <br />$11,500. <br /> <br />The Crime Bond Program provides a $10 million limit with a $25,000 per <br />occurrence deductible and covers the following: <br /> <br />1. Employee dishonesty with faithful performance coverage <br />2. Forgery and alteration <br />3. Theft, disappearance and destruction <br />4. Robbery and safe burglary <br />5. Computer fraud including funds transfer coverage <br />6. Money orders and counterfeit paper currency <br /> <br />29A-2 <br />