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Agenda 03/10/2026 Item #11F (Approve the purchase of Property, Boiler & Machinery, Terrorism, and Watercraft Hull Insurance effective April 1, 2026)3/10/2026 Item # 11.F ID# 2026-503 Executive Summary Recommendation to approve the purchase of Property, Boiler & Machinery, Terrorism, and Watercraft Hull Insurance effective April 1, 2026, for an estimated amount of $8,224,016. OBJECTIVE: To purchase property and property-related insurance to protect the County’s real and personal property assets against losses caused by natural and man-made perils and to comply with the Stafford Act. CONSIDERATIONS: The County maintains a property insurance program in accordance with Section 311 (42 U.S.C. 5154) of the Stafford Act, which requires that an applicant for FEMA assistance “shall comply with regulations prescribed by the President to assure that, with respect to any property to be replaced, restored, repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may be reasonably available, adequate, and necessary, to protect against future loss to such property.” The current property insurance program expires on April 1, 2026, and contains the following provisions: • Total insured values are $1,445,187,628. The total limit of coverage purchased, also known as a Loss Limit, is $90,000,000. • The named windstorm deductible is 5% per building and contents with a minimum named storm deductible of $250,000. For all other perils, the deductible is $100,000 per occurrence. • Primary flood coverage is purchased through the National Flood Insurance Program (NFIP) on properties in special flood hazard zones. The property insurance program provides an additional $90,000,000 of flood coverage over the NFIP coverage of $500,000 per building and $500,000 per content maximum. • Covered perils are written on an “All Risk of Loss” basis. Loss valuation is on a replacement cost basis. Even in a soft insurance market, accurate insurable values and robust COPE (construction, occupancy, protection, and exposure) data remain critical, as underreported replacement cost and outdated risk characteristics can lead to underinsurance, claims friction, and abrupt pricing corrections when losses occur or market conditions inevitably tighten again. To address this concern, the following change was implemented: • A value increase of 4.85% was applied. This increased total insured values to $1,515,209,791 and reflects the addition of a newly constructed facility. Although total insured values are $1,515,209,791, it is unlikely that the County will suffer a total loss. Given the opportunistic nature of the insurance market, the County has an opportunity to increase the total property limit. Staff recommends that the County purchase a $100,000,000 loss limit. The commercial property insurance and reinsurance marketplaces continue to soften in 2026 as, for the first time in ten years, no hurricane made landfall in the United States in 2025. This has accelerated positive underwriting results which were underpinned by previous years’ discipline in capacity deployment, risk pricing, and attachment point selection. In the first quarter of 2026, aggressive competition will continue for accounts with favorable loss histories, good loss mitigation programs, and low exposure to catastrophic risks, such as wind, hail, named storms, or wildfire. For catastrophe-exposed accounts, carriers will show interest if premium levels are deemed attractive and adequate. The projected decrease for the 2026 renewal is 3.68%. To market the program, the County’s broker, Brown & Brown, approached forty-three (43) carriers for proposals. In the current marketplace, it is greatly advantageous to negotiate premiums and coverage terms up to the expiration date. Therefore, at the time of this submission, terms and conditions of the property renewal have not been finalized. Coverage will be negotiated up to the April 1, 2026, renewal date. The 2026/2027 property and total premiums are provided as estimated premium costs. Further options to improve the overall program, including a named windstorm deductible cap may be available for additional premium. The projected renewal comparison for FY 2026 is illustrated below: 3/10/2026 Item # 11.F ID# 2026-503 2025/2026 2026/2027 Line of Coverage Bound Annual Premium Estimated Annual Premium $ Difference % Difference Property: $8,428,764 $8,105,500 ($323,264) -3.84% Boiler & Machinery: $61,097 $66,827 $5,730 9.38% Terrorism: $36,539 $40,082 $3,543 9.70% Watercraft Hull: $11,672 $11,607 ($65) -.0056% TOTAL PREMIUM: $8,538,072 $8,224,016 ($314,056) -3.68% • Total Insured Values increased by 4.85%. • The property insurance rate per $100 decreased by 8.13%. • The property limit increased by over 10% for a total loss limit of $100,000,000. • The overall program cost decreased 3.68% or $314,056. In terms of financial stability, each of the carriers possesses a minimum Best’s rating of A- or higher. This item is consistent with the Collier County strategic plan objective to prepare for the impacts of natural disasters on our critical infrastructure and natural resources. FISCAL IMPACT: Based upon the current Schedule of Values, the estimated annual premium for all programs is $8,224,016. The broker and staff will continue to pursue further options to improve the overall program, up to the April 1, 2026, renewal date. These efforts may result in lower program cost or improved policy terms available for additional premiums. Funds are budgeted and available in Fund 5016 (Property and Casualty Insurance Fund) for this purchase. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this item. LEGAL CONSIDERATIONS: This item is approved as to form and legality and requires majority vote for Board approval. —SRT RECOMMENDATION(S): To approve the purchase of Property, Boiler & Machinery, Terrorism and Watercraft Hull insurance as set forth herein, and authorize the County Manager or designee to complete any applications or other documents necessary to bind coverage and services for a one-year period effective April 1, 2026. PREPARED BY: Michael K. Quigley, RMPE, Division Director, Risk Management ATTACHMENTS: 1. Collier 4-1 BOCC Agenda Backup Prop Insurance 2-23-2026 1 | P a g e COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS, ET AL Property Insurance Program Renewal – To be Effective 4/1/2026-27 Executive Summary The County’s four (4) property related programs will renew effective April 1, 2026-27: • Master Layered Property Program • Terrorism and Sabotage • Boiler & Machinery • Watercraft Hull The 1st Quarter 2026 insurance market is experiencing notable improvement, driven by shifts in capacity, competition and market dynamics. Below is an overview of our process and strategy to achieve favorable results for these insurance renewals for Collier County. Financial Results In the current marketplace it is greatly advantageous to negotiate premiums and coverage terms up to the expiration date. Therefore, at the time of submitting this backup information for the Board of Commissioners Agenda, terms and conditions of the Property renewal have not been finalized. Quotes have been received for the other three lines of insurance. The below 2026/2027 Property and Total Premiums are provided as Estimated Premium costs. 2025/2026 2026/2027 Difference LINE OF COVERAGE BOUND ANNUAL PREMIUM ESTIMATED ANNUAL PREMIUM $ % Property $100M Limit $8,428,764 $8,105,500 ($323,264) -3.84% Boiler & Machinery $61,097 $66,827 $5,730 9.38% Terrorism $36,539 $40,082 $3,543 9.70% Watercraft Hull $11,672 $11,607 ($65) -0.56% TOTAL ESTIMATED PREMIUM $8,538,072 $8,224,016 ($314,056) -3.68% 2 | P a g e We are pleased to deliver, at this time, an overall PROPERTY RATE DECREASE of 8.3% ($323,264 PREMIUM SAVINGS) while increasing the property limits by over 10% from $90,000,000 limit to $100,000,000. The projected 2026-2027 insurance program renewal premiums reflect a total estimated cost of $8,224,016 which is a decrease of approximately 3.68% ($314,056) over the expiring. The current property insurance market is opportunistic, and the County (through Brown & Brown) has been successful in obtaining quotes which will reduce premiums while increasing our wind coverage by $10,000,000. Negotiations with carriers continue regarding potential improved deductible application conditions as well as rate guarantees for future years to hedge against adverse market and claims development. Our total insured values (TIV) increased 4.85% to $1.515 billion dollars. Risk Management, in conjunction with our Brown & Brown Team, has aggressively marketed our program to global insurance companies to ensure securing the best available rates and coverage. The Watercraft Hull is presented with a flat rate, and the Boiler & Machinery and Terrorism policies are presented with not-to-exceed figures for increased limit options. Due to favorable and competitive market conditions, the County has the option to purchase additional limits to increase the overall property coverage . The total estimated value in the chart uses the $100M Limit for budgeting purposes. Additional savings may be realized by purchasing the lower limits. Further options to improve the overall program, including a Named Windstorm deductible cap, may be available for additional premium. Insured Asset Valuation Strategy Even in a soft insurance market, accurate insurable values and robust COPE data remain critical, as underreported replacement costs and outdated risk characteristics can lead to underinsurance, claims friction, and abrupt pricing corrections when losses occur or market conditions inevitably tighten again. Property Asset Valuations continue to be of concern to Property underwriters in 2026 due to supply chain and inflationary impacts to materials and labor costs. Therefore, we have worked with County Risk Management to provide thoughtful valuation trends to the Property Schedule the past 3 years. Strategies to update Replacement Values the past 3 years: 2024 (overall increase in insured values 17.47%): • TIV Bound - $1,407,748,220 • Building Valuation Trend of 8% • Revaluation of Lift Stations (significant Ian claims) 2025 (overall increase in insured values 2.66%): • TIV Quoted - $1,445,187,628 3 | P a g e • Due to ease of inflationary pressures, trend of 2% for all Building structures • Add new Pelican Bay Maintenance Facility 2026 (overall increase in insured values 4.85%): • TIV Quoted - $1,515,209,791 • trend of 3% for all Building structures • Add new EMS/Fire Station 74 In addition, updates to the County’s property/asset schedule, such as deleting demolished or sold properties, adding newly constructed buildings and CIP updates, are collected throughout the year. It is important to note a significant coverage extension provides for the addition of assets of up to 5% of the Total Values with no additional premium during the policy period. Hurricane Claims History ➢ Hurricane Milton o Claim closed, no payment (damages below deductible) ➢ Hurricane Helene o Claim closed, no payment (damages below deductible) ➢ Hurricane IAN o $23.5M+ insurance loss o Over $18M in losses resulting from Lift Stations ➢ Hurricane IRMA o $20m loss paid by insurance 4 | P a g e Risk Exposure Analysis Number of Insured Units by location Exposed Values by location 5 | P a g e Property Marketing Summary We approach the international marketplace to negotiate the best quotes for coverage and premium. Insurance companies approached to provide quotes include: ➢ Lloyd’s of London Syndicates ➢ London and other European Markets ➢ US/Domestic Markets: 6 | P a g e 2026-2027 DRAFT Property Participation Structure $100M Total Limit Structure Pending 2025-2026 Property Participation Structure **NOT TO SCALE $90M $75M $50M $25M 25% or $3,750,000 part of $15M Excess $75M Ironshore 10% or $2,500,000 part of $25,000,000 Primary Berkshire/National Fire 10% or $2,500,000 part of $25,000,000 Primary Westchester 5% or $1,250,000 part of $25,000,000 Primary Everest 17.95% or $4,487,500 p/o $25M Excess $25M Lloyds (Ark, KI & LECTIO ) 7.05% or $3,525,000 p/o $50M Excess $25M Lloyds (HCC & LECTIO ) 10% or $2,500,000 part of $25M Excess $50M Sompo/ Endurance 7.95% or $1,987,500 part of $25M Excess $50M Lloyds (HCC, Equinox, LECTIO)53.25% or $47,925,000 part of $90,000,000 PRIMARY Lloyds of London (BRIT 4%, ARK 2.5%, GIC 6.66%, CIN 3%, Ki 8.8%, LECTIO 10.24%, WBC 4%, AES 4%, APL 3%, AML 2.5%, Fidelis 10%, HAM 4%, Lanc 5%, Argo 5%, LECTIO 13.33%,AXAXL 5%, AFB, 4%, LECTIO 3.69%) *LEAD* 5.5% or $4,950,000 part of $90,000,000 PRIMARY CORE/ StarStone 3% or $2,700,000 part of $90,000,000 PRIMARY Beazley 5% or $4,500,000 part of $90,000,000 PRIMARY Lexington 5.5% or $4,950,000 part of $90,000,000 PRIMARY RSUI/ Landmark 2.75% or $4,750,000 part of $90,000,000 PRIMARY Westfield 7 | P a g e Property Insurance Market Trends The commercial property insurance and reinsurance marketplaces continue to soften in 2026 as, for the first time in 10 years, no hurricanes made landfall in the US in 2025. This has accelerated positive underwriting results which were underpinned by previous years’ discipline in capacity deployment, risk pricing and attachment point selection. This quiet season has hastened the softening of the commercial property markets. Most carriers were profitable in 2025 which has led to increased capacity and new domestic carriers bringing additional opportunities in 2026. Lloyds of London has 7 new syndicates generating additional competition for premium dollars. All of this is creating a buyers’ market resulting in better terms and downward pressure on rates. In the first quarter of 2026, aggressive competition will continue for accounts with favorable loss histories, good loss mitigation programs and low exposure to catastrophic risks, such as wind, hail, named storms or wildfire. For catastrophe- exposed accounts, carriers will show interest if premium levels are deemed attractive and adequate. Early renewals in Florida have resulted in rate decreases, broader coverage (blanket endorsements are returning) and offerings of higher limits. We are not yet seeing reductions of Named Windstorm deductibles but that may happen later in 2026 if the windstorm season remains quiet. Underwriting for individual accounts will continue to focus on catastrophic risk exposures, insurance to value adequacy and property risk control measures. The inflationary pressures on insurable values have eased, with moderate single-digit year-over increases deemed sufficient for all but the most undervalued portfolios. 1 | P a g e COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS, ET AL Property Insurance Program Renewal – To be Effective 4/1/2026-27 Executive Summary The County’s four (4) property related programs will renew effective April 1, 2026-27: • Master Layered Property Program • Terrorism and Sabotage • Boiler & Machinery • Watercraft Hull The 1st Quarter 2026 insurance market is experiencing notable improvement, driven by shifts in capacity, competition and market dynamics. Below is an overview of our process and strategy to achieve favorable results for these insurance renewals for Collier County. Financial Results In the current marketplace it is greatly advantageous to negotiate premiums and coverage terms up to the expiration date. Therefore, at the time of submitting this backup information for the Board of Commissioners Agenda, terms and conditions of the Property renewal have not been finalized. Quotes have been received for the other three lines of insurance. The below 2026/2027 Property and Total Premiums are provided as Estimated Premium costs. 2025/2026 2026/2027 Difference LINE OF COVERAGE BOUND ANNUAL PREMIUM ESTIMATED ANNUAL PREMIUM $ % Property $100M Limit $8,428,764 $8,105,500 ($323,264) -3.84% Boiler & Machinery $61,097 $66,827 $5,730 9.38% Terrorism $36,539 $40,082 $3,543 9.70% Watercraft Hull $11,672 $11,607 ($65) -0.56% TOTAL ESTIMATED PREMIUM $8,538,072 $8,224,016 ($314,056) -3.68% 2 | P a g e We are pleased to deliver, at this time, an overall PROPERTY RATE DECREASE of 8.3% ($323,264 PREMIUM SAVINGS) while increasing the property limits by over 10% from $90,000,000 limit to $100,000,000. The projected 2026-2027 insurance program renewal premiums reflect a total estimated cost of $8,224,016 which is a decrease of approximately 3.68% ($314,056) over the expiring. The current property insurance market is opportunistic, and the County (through Brown & Brown) has been successful in obtaining quotes which will reduce premiums while increasing our wind coverage by $10,000,000. Negotiations with carriers continue regarding potential improved deductible application conditions as well as rate guarantees for future years to hedge against adverse market and claims development. Our total insured values (TIV) increased 4.85% to $1.515 billion dollars. Risk Management, in conjunction with our Brown & Brown Team, has aggressively marketed our program to global insurance companies to ensure securing the best available rates and coverage. The Watercraft Hull is presented with a flat rate, and the Boiler & Machinery and Terrorism policies are presented with not-to-exceed figures for increased limit options. Due to favorable and competitive market conditions, the County has the option to purchase additional limits to increase the overall property coverage . The total estimated value in the chart uses the $100M Limit for budgeting purposes. Additional savings may be realized by purchasing the lower limits. Further options to improve the overall program, including a Named Windstorm deductible cap, may be available for additional premium. Insured Asset Valuation Strategy Even in a soft insurance market, accurate insurable values and robust COPE data remain critical, as underreported replacement costs and outdated risk characteristics can lead to underinsurance, claims friction, and abrupt pricing corrections when losses occur or market conditions inevitably tighten again. Property Asset Valuations continue to be of concern to Property underwriters in 2026 due to supply chain and inflationary impacts to materials and labor costs. Therefore, we have worked with County Risk Management to provide thoughtful valuation trends to the Property Schedule the past 3 years. Strategies to update Replacement Values the past 3 years: 2024 (overall increase in insured values 17.47%): • TIV Bound - $1,407,748,220 • Building Valuation Trend of 8% • Revaluation of Lift Stations (significant Ian claims) 2025 (overall increase in insured values 2.66%): • TIV Quoted - $1,445,187,628 3 | P a g e • Due to ease of inflationary pressures, trend of 2% for all Building structures • Add new Pelican Bay Maintenance Facility 2026 (overall increase in insured values 4.85%): • TIV Quoted - $1,515,209,791 • trend of 3% for all Building structures • Add new EMS/Fire Station 74 In addition, updates to the County’s property/asset schedule, such as deleting demolished or sold properties, adding newly constructed buildings and CIP updates, are collected throughout the year. It is important to note a significant coverage extension provides for the addition of assets of up to 5% of the Total Values with no additional premium during the policy period. Hurricane Claims History ➢ Hurricane Milton o Claim closed, no payment (damages below deductible) ➢ Hurricane Helene o Claim closed, no payment (damages below deductible) ➢ Hurricane IAN o $23.5M+ insurance loss o Over $18M in losses resulting from Lift Stations ➢ Hurricane IRMA o $20m loss paid by insurance 4 | P a g e Risk Exposure Analysis Number of Insured Units by location Exposed Values by location 5 | P a g e Property Marketing Summary We approach the international marketplace to negotiate the best quotes for coverage and premium. Insurance companies approached to provide quotes include: ➢ Lloyd’s of London Syndicates ➢ London and other European Markets ➢ US/Domestic Markets: 6 | P a g e 2026-2027 DRAFT Property Participation Structure $100M Total Limit Structure Pending 2025-2026 Property Participation Structure **NOT TO SCALE $90M $75M $50M $25M 25% or $3,750,000 part of $15M Excess $75M Ironshore 10% or $2,500,000 part of $25,000,000 Primary Berkshire/National Fire 10% or $2,500,000 part of $25,000,000 Primary Westchester 5% or $1,250,000 part of $25,000,000 Primary Everest 17.95% or $4,487,500 p/o $25M Excess $25M Lloyds (Ark, KI & LECTIO ) 7.05% or $3,525,000 p/o $50M Excess $25M Lloyds (HCC & LECTIO ) 10% or $2,500,000 part of $25M Excess $50M Sompo/ Endurance 7.95% or $1,987,500 part of $25M Excess $50M Lloyds (HCC, Equinox, LECTIO)53.25% or $47,925,000 part of $90,000,000 PRIMARY Lloyds of London (BRIT 4%, ARK 2.5%, GIC 6.66%, CIN 3%, Ki 8.8%, LECTIO 10.24%, WBC 4%, AES 4%, APL 3%, AML 2.5%, Fidelis 10%, HAM 4%, Lanc 5%, Argo 5%, LECTIO 13.33%,AXAXL 5%, AFB, 4%, LECTIO 3.69%) *LEAD* 5.5% or $4,950,000 part of $90,000,000 PRIMARY CORE/ StarStone 3% or $2,700,000 part of $90,000,000 PRIMARY Beazley 5% or $4,500,000 part of $90,000,000 PRIMARY Lexington 5.5% or $4,950,000 part of $90,000,000 PRIMARY RSUI/ Landmark 2.75% or $4,750,000 part of $90,000,000 PRIMARY Westfield 7 | P a g e Property Insurance Market Trends The commercial property insurance and reinsurance marketplaces continue to soften in 2026 as, for the first time in 10 years, no hurricanes made landfall in the US in 2025. This has accelerated positive underwriting results which were underpinned by previous years’ discipline in capacity deployment, risk pricing and attachment point selection. This quiet season has hastened the softening of the commercial property markets. Most carriers were profitable in 2025 which has led to increased capacity and new domestic carriers bringing additional opportunities in 2026. Lloyds of London has 7 new syndicates generating additional competition for premium dollars. All of this is creating a buyers’ market resulting in better terms and downward pressure on rates. In the first quarter of 2026, aggressive competition will continue for accounts with favorable loss histories, good loss mitigation programs and low exposure to catastrophic risks, such as wind, hail, named storms or wildfire. For catastrophe- exposed accounts, carriers will show interest if premium levels are deemed attractive and adequate. Early renewals in Florida have resulted in rate decreases, broader coverage (blanket endorsements are returning) and offerings of higher limits. We are not yet seeing reductions of Named Windstorm deductibles but that may happen later in 2026 if the windstorm season remains quiet. Underwriting for individual accounts will continue to focus on catastrophic risk exposures, insurance to value adequacy and property risk control measures. The inflationary pressures on insurable values have eased, with moderate single-digit year-over increases deemed sufficient for all but the most undervalued portfolios.