the municipal secretary desktop reference manual - Southwestern ...

2. Deductibles
a. Review annually
b. Set up reserve if possible
c. Set higher if good claims history
d. Practice risk management
3. Act 477 Coverage
a. Only if needed
b. Applies only to paid police, fire and park guards
c. If only a few, could possibly be paid out of general fund or by special account which
draws interest. (Remember, you have already budgeted for full salary for these
positions)
4. Co-Insurance vs. Agreed Amount
a. Applies to property insurance only
b. Co-insurance must be carried at stated percentage of property value (80% or 90%) in
return for slight reduction in premium.
c. Property values must be kept current.
i. If property values are not kept current then a penalty will be assessed in the
event of a loss.
ii.
Good idea to have property appraisals.
d. Agreed amount is simpler. Insurers and insured agree on an amount of coverage
and insurance covers up to that amount
5. Replacement Cost vs. Actual Cash Value
a. Replacement cost pays to restore or replace at today=s cost without factoring in
depreciation
b. Actual cash value is the cost less depreciation
c. Replacement cost is usually the better of the two when considering property
coverage
XIV-15