Gardena : Higher Liability Premiums

The City Council unanimously voted to renew the city’s liability insurance, but its premiums will be higher than last year for less than half the coverage.

Meanwhile, in a move he predicted will “shake up the insurance industry,” Councilman Mas Fukai directed the city staff to investigate the possibility of the city forming its own insurance company as a protest against spiraling municipal liability insurance costs.

“This is a total rip-off by the insurance industry,” Fukai said. “I know that other cities have tried self-insurance, but insurance lobbyists have talked them out of it. I don’t think this council would cave in.”

“Our city has been in the forefront of innovative financing efforts in recent years,” said Mayor Don Dear. “This would be a nationwide, on-the-map thing for Gardena. It has exciting possibilities.”

City Manager Kenneth Landau, however, recommended against self-insurance for the upcoming year, noting that Gardena has only $4 million in reserves.

The city paid Planet Insurance Co. $38,696 for $10 million in coverage two years ago, according to city officials, and $237,203 for $5 million coverage last year. The city will pay $240,189 for $2 million in coverage this year, with a $250,000 deductible.