SHREVEPORT, LA (KSLA) - Shreveport Mayor Adrian Perkins insists the city is fully insured for all of its $815 million in assets.
But some city leaders cautioned that the city is massively underinsured by hundreds of thousands of dollars because of changes made by the mayor. However, Mayor Perkins says this is a big misunderstanding about the city’s insurance coverage.
First off, Perkins said the council’s direction the city has now raised its insurance coverage for the maximum payout for what’s called a ‘single occurrence.’
Perkins said that coverage has now risen from $50 million to $300 million with their new insurance carrier; but, some still question if that’s enough.
At a special meeting on Monday, April 15, the city’s internal auditor informed council members that the City of Shreveport is grossly underinsured if a huge catastrophe were to strike.
Mayor Perkins was out of town during that special meeting. Now he says all the assets are fully insured, just not for one giant single event.
“And to put some perspective on it, in the last decade or so we’ve only required $815,000 and if you combine it.”
Councilman James Flurry said some of Shreveport’s assets far exceed the city’s maximum insurance payout of $50 million per claim, or single occurrence.
“A gas leak right here at this building, blow this place completely off the blocks," Flurry said. "And 50 million would never replace this property.”
At the Monday meeting council members were shown a graphic that displayed some of the most valuable assets.
That included Independence Stadium, valued at $91.6 million and Shreveport's Downtown Convention Center, valued at $84.7 million.
Councilman Flurry said he's relieved that the single occurrence maximum payout limit has now been upped from $50 million to $300-million in case disaster were to strike.
But Flurry added that he would like it to be even higher, possibly as much as $500 million.
Those insurance coverage changes went into effect in late 2018. Perkins explained the rationale for why the city switched from Arthur J. Gallagher and Company to Frost Insurance in Dallas.
“We switched to achieve two things," Perkins said. "One, better outcomes. We wanted to see if we could get better rates and save money in the market. And two, we wanted to have minority participation.”
But the city is actually paying $185 thousand dollars more a year for insurance, with less coverage. Perkins said rates are rising industry-wide.
Perkins concluded that increasing their single occurrence insurance payout limit to $300 million dollars this week has cost the city an extra $173 thousand dollars a year. He cautioned that higher coverage will mean even higher fees at a time when they’re trying to save money.