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UC DAVIS: RISK MANAGEMENT SERVICES June 16, 2004 DEANS, DIRECTORS, DEPARTMENT CHAIRS & CAMPUS ADMINISTRATIVE OFFICERS RE: PURCHASE OF ADDITIONAL “Buydown” THEFT INSURANCE FOR DEDUCTIBLE REDUCTION ON EQUIPMENT THEFTS It's that time of year again when departments have the opportunity to purchase Additional Theft Insurance for their equipment to reduce deductibles in the event of a loss due to theft during the coverage period of July 1, 2004 thru June 30, 2005. Over the last three years the property self-insurance program has paid claims for $215,843 worth of losses in stolen equipment. Departments experiencing these losses paid deductibles totaling $54,500. Had all of the departments insured their equipment under the Additional “Buydown” Theft Insurance, campus deductible costs would have been reduced by over 30%. Risk Management Services encourages departments (and is available for consultations) to have good loss prevention controls in effect and to explore risk management options, such as key and inventory controls, burglar alarms and security devices so that losses can be avoided altogether. However, sometimes our best mitigation efforts are not enough. Losses due to theft can be an expensive proposition for a department struggling with an already tight budget and can have a negative impact on achievement of academic and administrative objectives. The Basic Property Program, provided at no additional expense to departments, carries deductibles for forced or non-forced entry theft of $1,000 and $5,000 respectively per occurrence. The Additional Theft Buy-Down Insurance can substantially minimize the financial exposure to a department, particularly for theft-sensitive equipment, such as laptop computers and LCD projectors, by reducing that exposure to $250 and $1,000, respectively. Currently the annual premium cost to a department remains at $.40 per $100 of value (Total Equipment Value x $.004 = Total Premium); however, an increase could certainly be announced with the new fiscal year. The Additional Theft Buy-down Insurance is a risk-financing tool your department may want to consider. However, while this coverage is available throughout the fiscal year for any new equipment acquired, it can only be requested for existing equipment during this annual renewal time. More details regarding both the Basic Property Insurance and the Additional Theft Insurance coverage are available at the Risk Management Services website at http://rms.ucdavis.edu. You are urged to review this material, consider the benefit of this program, and submit requests to Risk Management Services as indicated on the website NO LATER THAN FRIDAY, JULY 30, 2004. Your department may already be utilizing this program, in which case the contact person(s) indicated in our records will receive a notice for renewal with a list of existing coverage for updating. Please forward this message to the person having responsibility for your department equipment inventory. If you are unsure whether your department is currently utilizing the program, please feel free to contact Sandy Hendrix at sahendrix@ucdavis.edu or 752-3140 for additional assistance. Remember that you only have until July 30, 2004 to take advantage of this program for existing equipment. Don’t miss this opportunity to potentially save on departmental out-of-pocket costs. Deborah M. Luthi, ARM Director Risk Management Services 04-061
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