8N
Date: September 15, 2026
To: Honorable Mayor and Members of the City Council
From: Ian Dailey, Finance Director
By: Jonathan Lackey, Risk Manager | [email protected] Subject: Finance – Approve Final Premium Adjustment for Automobile Physical Damage Insurance Coverage. Expenditure: Not-To-Exceed $58,996 (Non-General Fund).
RECOMMENDATION
Recommendation of the Finance Director that City Council approve a final premium adjustment with The Hanover Insurance Group, Inc. through Alliant Insurance Services Inc. of Irvine, CA, for an amount not-to-exceed $58,996.00, for automobile physical damage insurance coverage.
FUNDING
Funding is available in the Self-Insurance Fund’s fiscal year 2025-26 operating budget.
DISCUSSION
On June 17, 2025, City Council approved renewal of the City’s automobile physical damage insurance coverage with The Hanover Insurance Group, Inc. (Hanover) through Alliant Insurance Services, Inc. The approved premium was $335,482 for the one-year period beginning July 1, 2025, and ending July 1, 2026.
T he policy provided coverage for physical damage to the City’s scheduled vehicles and contractors’ equipment resulting from collision, fire, theft, vandalism, and other covered causes of loss. The premium was based on the vehicle and equipment schedules available at the beginning of the policy period and was subject to an annual reporting adjustment for additions, removals, and changes in insured values.
Final Audit Adjustment
As required by the insurance policy, at the conclusion of the policy period, Hanover reviewed the City’s updated vehicle and equipment schedules. Hanover calculated the final premiums using the average insured values during the policy period and the applicable reporting rates. 1 City Council
September 15, 2026
The final audit produced the following results:
Coverage Beginning
Value (7/1/25)
Ending Value
(6/30/26)
Final Earned
Premium Charge
Additional
Premium Charge
Automobile $89,805,151 $119,687,144 $369,754 $53,006
Contractors
Equipment
$2,831,610 $6,215,580 $16,014 $5,990
Total $385,768 $58,996
The insured value of the City’s automobile fleet increased largely due to the addition of 24 Torrance Transit buses along with other vehicles purchased during the fiscal year that had exceeded useful life as part of the routine replacement cycle.
The insured value of contractors’ equipment increased as well. This increase reflects newly acquired equipment and equipment identified during the final audit that was not included on the beginning schedule, net of equipment removed or otherwise adjusted during the policy period.
Hanover calculated a final earned premium of $369,754 for automobile physical damage coverage and $16,014 for contractors’ equipment coverage, for a combined final earned premium of $385,768. After applying the deposit premiums, the additional premium due is $53,006 for automobile and $5,990 for contractors’ equipment coverage, for a total final adjustment of $58,996.
ATTACHMENTS
1. Hanover Premium Adjustment – Autos
2. Hanover Premium Adjustment – Contractors Equipment
3. Hanover Premium History with Premium Adjustment
2 401-0031
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
POLICY CHANGE Policy Change Number 3
POLICY CHANGE
POLICY NUMBER
TERM
POLICY EFFECTIVE DATE
EFFECTIVE DATE
YR(S)
FROM
TO
0 7
/
0 1/202
5 IH3 H668343 0
4 1
07/01/202
5 07/01/202
6 NAMED INSURED
CITY OF TORRANCE
3031 TORRANCE BLVD
TORRANCE CA
90503
AUTHORIZED REPRESENTATIVE
ALLIANT INSURANCE SERVICES
INC
18100 VON KARMAN AVE 10 FL
IRVINE, CA
92612
AGENCY CODE
1001638
COVERAGE PART AFFECTED
Commercial Inland Marine Coverage Part
Commercial Property Coverage Part
Boiler and Machinery Coverage Part
Commercial General Liability Coverage Part
Commercial Auto Coverage Part
Commercial Crime Coverage Part
CHANGES
AUTO PHYSICAL DAMAGE ANNUAL REPORT FOR THE PERIOD OF 07/01/2 02 5 TO 07/01/2
02 6:
BEGINNING SCHEDULED:
$89,805,151
ENDING SCHEDULED: $119,687,144
AVERAGE SCHEDULED: $104,746,148
REPORTING SCHEDULED RATE: $0.353
EARNED PREMIUM: $369,754
DEPOSIT PREMIUM: $316,748
MINIMUM PREMIUM: $0
ADDITIONAL PREMIUM DUE: $53,006
OLD
POLICY
PREMIUM
NEW
POLICY
PREMIUM
PREMIUM DUE *
$327,037
$327,037
$
53,006
HANOCASH APPLICABLE YES
NO
*Parentheses indicate a return premium
Countersigned By
Authorized Representative Signature
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ATTACHMENT 2
4 ATTACHMENT 3
Auto Property Damage Insurance Historical Premium
Policy Year Carrier
Name Coverage Deductible
Information Premium ($)
2022-2023 Hanover All risk coverage for all
vehicles owned and vehicles
leased from others.
$25k Deductible $192,244
2023-2024 Hanover All risk coverage for all
vehicles owned and vehicles
leased from others.
$25k Deductible $240,687
2024-2025 Hanover All risk coverage for all
vehicles owned and vehicles
leased from others.
$50k Deductible $328,632
2025-2026 Hanover All risk coverage for all
vehicles owned and vehicles
leased from others.
*Plus, Premium Adjustment
$50k Deductible $326,772
$ 58,966*
$385,738
2026-2027 Hanover All risk coverage for all
vehicles owned and vehicles
leased from others.
$50k Deductible $526,254
5