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  • Frequently Asked Questions
Isn't the State self-insured against any type of property-related loss?
No
The State does maintain large aggregate deductibles ($5 million for earthquake and flood, and $5 million for all other perils; builders' risk insurance requires a separate $2.5 million aggregate deductible for earthquake and flood, and $1 million for all other perils). Insurance policies are procured annually through a competitive bidding process administered by the State's insurance broker, Willis, Inc.
What does replacement cost mean?

Replacement cost means simply the cost to replace an item (with an item of like, kind, and quality) at today's cost without applying depreciation. The State provides replacement cost coverage on both buildings and contents.

What is all-risk coverage?

Coverage is provided for direct loss by those perils which are not specifically excluded by the policy.


What deductibles will my agency be responsible for in the event of a property loss?

  • Property - $25,000 per occurrence for covered losses, other than earthquake and flood.
  • Earthquake - 1% of total insured value(s) with a $100,000 minimum.
  • Flood:  $5 million deductible per occurrence for all flood zones.
What items are covered under the State's Property Insurance?

All State-owned buildings and contents are covered.

What types of property are not covered?

Such items include land, trees, landscaping (shrubs, plants, etc.), animals, aircraft, watercraft, automobiles, semi-trailers, self-propelled machines and vehicles licensed for highway usage (whether on or off the premises), money, securities, jewelry or precious stones. Also excluded are utilities (above or below ground), outdoor lighting standards and associated equipment, etc., unless these items are specifically included in the most recent statement of values (Property Report).


What types of perils (causes of loss) are not covered?

Such perils include loss or damage caused by dishonest acts, unexplained disappearance, inventory shortage, wear and tear, mechanical breakdown, rust or corrosion, latent defect, settling or cracking of any part of a building, artificially generated electric currents which damage electrical devices (except electronic data processing systems), insects, birds animals, freezing (ensuing water damage may be covered), sewage backup, faulty workmanship, terrorism, cyber risks (computer viruses), mold, and asbestos.


Are personal items covered under the State's Program?

No
Your Homeowner's or Renter's policy generally provides coverage for personal items away from the premises (your residence).

Are paintings and other fine arts considered contents?

In a sense, they are considered contents, but because of their unique qualities, they must have an appraised value recorded on a statement of values. Statewide coverage is afforded by an individual Fine Arts Policy. This policy provides wall-to-wall coverage, with no deductible (except for flood and earthquake - $10,000 per occurrence). Incoming loans require fully executed loan agreements with an agreed appraised value for each object on loan. For loaned objects valued at $50,000 or more, a written appraisal and photograph are required. An appraisal by a qualified State Curator is acceptable.


Are there situations where contents other than State-owned may be covered?

Yes
If the State is required by contract to provide insurance for an item which is in the State's care, custody, and control. These contracts must be submitted to Risk Management for review before coverage can be approved.

NOTE: Fine arts on loan to the State will require a loan agreement.
If the State provides built-in equipment or other improvements to a non-owned building, is coverage available?

Coverage is afforded for improvements and betterments if the State has a financial interest in such improvements and/or if coverage is required by contract.

Are State-owned items covered while in transit from one location to another?

Items in transit are covered with certain restrictions. Risk management must be informed before the transfer takes effect. You must also report which facilities are involved so contents adjustments may be effected. Items must be transported by State employees. We do not provide insurance coverage for individual carriers for hire. The limit for transit coverage is $1 million per occurrence. This limit does not apply to fine arts.

How often are building and contents values updated?

A complete update is performed twice a year on January 1 and July 1. Currently, Property Insurance Reports are accessed through the Risk Management website by all departments, agencies, and institutions on a semiannual basis, to record all new updates and changes. It is important to note, however, that when there is a change in the status of insured properties, you should report that change immediately by e-mail or other means. Coverage will be bound immediately, and the change will be entered into the property data system. This will ensure that the change will be reflected on the next property insurance report.


How are property insurance premiums determined?

Premiums are determined by multiplying the agency's building and contents values by insurance rates which indicate the level of risk involved. These rates are based on specific risk factors including location, occupancy, type of construction, sprinkler protection, fire protection classification, and exposure hazards. Premiums are then allocated to all agencies, departments, and institutions based on the above criteria.

What is the process for reporting a property claim?

Click on the claims process button for this information.


What is Builder's Risk Insurance?

This is a type of property insurance that is provided for construction projects approved by the State Building Commission. Such projects include new building construction, additions to existing State buildings, or renovations to existing State buildings. This insurance is temporary in that coverage is only provided during the course of construction.

There is a $10,000 deductible per occurrence for covered perils other than earthquake and flood. This deductible is the responsibility of the general contractor. Deductibles for flood range from $50,000 to $500,000, depending on the flood zone. Deductibles for earthquake range from $50,000 to $250,000 depending on the earthquake zone. The contractor is only responsible for the first $10,000 with the remainder of the deductible assumed by the agency involved.

Does the State provide fidelity coverage for employee dishonesty?

Yes. The State procures fidelity and crime coverage in the amount of $1 million per occurrence, for all State employees. There is a $100,000 per occurrence deductible, which applies to each loss.