Everyone has to have insurance for the property they own; even when it is public property owned by the taxpayers like a park shelter, a fire station, school building or a library. In 1903 the state of Wisconsin created the State Property Insurance Fund to uniformly insure all state properties. Coverage in that fund was extended to all local governments and library boards by 1913. In 1979, the Local Government Property Insurance Fund was spun off and stands as a separate program today. The Local Government Property Insurance Fund currently insures property for 974 local governmental units including 51 local governments in the 27th Senate District.
The Local Government Insurance Fund is eliminated in Governor Walker’s budget; the reason stated that these entities could be insured in the private market. Indeed, many of those covered in the Local Government Insurance Fund could seek coverage elsewhere. Many of them may even find insurance, but they would likely pay more for it and have less coverage.
Basically the Local Government Property Insurance Fund is its own insurer. There are no agents and no agent 10%-17% commission to be paid for coverage. The premium rates paid by local government tax dollars are low. The program is simple, anyone from a Town Clerk to a Sanitary District Chair to a volunteer Fire Department Chief could figure it out because there is only one policy. This one policy sets broad coverage for property and is easy to sign up for. The rates of the Local Government Property Insurance Fund are also low which saves taxpayer money.
The insurance private market reality is, there are some local governments and publicly owned properties which would be more difficult to find other insurance for because they are “high risk” because of past claims or the government has struggled with balancing their budget.
If it isn’t broken why are we trying to “fix” it? I have heard no battle cry from the private insurance market that they need to find local government clients. However there is the poor budget reality that local governments from towns to school districts have struggled with. The reality is that when local governments have to pay more to insure public property, taxpayers will be the ones that have to pay for it.
Bottom line: things that cost local governments more money cost taxpayers more money. This may not be the headline grabber in Governor Walker’s budget but it is a big deal for a city, town, school district and volunteer fire department near you. For more information on the Wisconsin State Budget or the Local Government Property Insurance Fund contact Senator Jon Erpenbach at 608-266-6670 or 888-549-0027 firstname.lastname@example.org