Special Reports

City doubles liability insurance coverage

Tacoma increased its liability insurance coverage to $10 million from $5 million last month - just weeks after some residents criticized the city for reducing its coverage to $5 million from $20 million a year ago.

The complaints came as the city stared at a $75 million wrongful death claim filed by the family of Crystal Brame, who was killed by her husband, Tacoma Police Chief David Brame, on April 26.

Thursday, Crystal Brame's family offered to reduce its claim to the limits of the city's insurance - about $9 million at the time of the shooting.

City officials have not officially responded to the revised claim.

The Clarendon America insurance coverage in force at the time of the shootings was a $5 million policy that required the city to pay the first $3 million of any settlement or judgment before it kicks in. Anything over $8 million must be paid by the city, which had about $1 million in its reserve account when the claim was filed.

If Crystal Brame's family wins a judgment greater than that, city officials would have to devise a way to pay it, either by cutting programs or raising taxes, city finance officials have said.

When the city's insurance comes up for renewal each August, a committee studies the bids and makes recommendations to the city manager on what to buy for the coming year, said acting risk manager Debbie Dahlstrom.

Last year, with a low history of claims and skyrocketing insurance rates, City Manager Ray Corpuz consulted with staff members before dropping the policy limits to $5 million from $20 million, Dahlstrom said.

That decision was largely influenced by two factors, city spokeswoman Carol Mathewson said: The city had a relatively good claims history, and premiums rose like the mercury on a summer thermometer.

The city paid $331,776 for its $20 million policy in 2001-2002. The self-insurance requirement was $1 million. The 2002-2003 policy cost $280,755 for $5 million - to be paid only after the city comes up with the first $3 million.

The 2003-2004 policy cost $480,840 for $10 million because of an increase in rates.

The insurance committee - finance director Steve Marcotte; chief assistant city attorney Elizabeth Pauli; Ken Turner of Tacoma Public Utilities; and Human Resources director Phil Knudsen - weighed the costs before recommending the purchase of two $5 million policies for the coming year, Dahlstrom said.

City Manager Jim Walton, who has the final say, agreed.

"I'm very comfortable with it," Walton said Thursday. "It wasn't necessarily pushed by the Brame situation. But you hope you're not underinsured and you hope you're not overinsured. You just never know."

Buying municipal liability insurance "is more of an art than a science," he added.

Dahlstrom said she's certain the Brame shootings colored the city's decision to raise its insurance coverage for 2003-2004.

Kris Sherman: 253-597-8659


Tacoma's liability insurance

Policy dates Aug. 13, 2003-Aug. 12, 2004 Aug. 13, 2002-Aug. 12, 2003 Aug. 13, 2001-Aug. 12, 2002

Amount of insurance $10 million $5 million $20 million

Cost $483,840 $280,755 $331,776

Carriers Clarendon America, Clarendon America unknown

Gulf Underwriters

City self-insurance $3 million $3 million $1 million

City insurance reserve $1 million $1 million unknown

Note: City's self-insurance pays first in a judgment or settlement. For example, in a settlement on the David Brame case, the city would pay the first $3 million, Clarendon America would pay the next $5 million and the city's reserve fund would pick up the rest. If a settlement or judgment exceeded $9 million, the city would have to find a way to pay the difference.

SOURCES: Tacoma Risk Management, Office of Management and Budget departments